CP (ELECTRIC) MANAGEMENT SERVICES LTD

Executive Summary

CP (Electric) Management Services LTD, incorporated in 2023 as a holding company, demonstrates a strong asset base and early profitability but faces liquidity challenges due to very high current liabilities relative to current assets. Governance is concentrated under a single controlling shareholder, and limited trading history tempers confidence in operational stability. Further inquiry into asset liquidity, working capital details, and related party transactions is recommended to fully assess financial resilience and risk exposure.

CP (ELECTRIC) MANAGEMENT SERVICES LTD - Analysis Report

Company Number: SC759814

Analysis Date: 2025-07-29 12:40 UTC

1. Risk Rating: MEDIUM
   Justification: The company shows a strong asset base and positive net assets, but the very high current liabilities relative to current assets and the nature of its financial structure as a holding company introduce moderate solvency and liquidity concerns. The recent incorporation and limited operating history also add some operational uncertainty.

2. Key Concerns:

• High Current Liabilities: Current liabilities (£57.36M) vastly exceed current assets (£1.26M), indicating potential short-term liquidity pressure despite reported net current assets stated in the accounts, which appears inconsistent and requires clarification.
• Concentration of Control: Single principal shareholder (Squared Bidco Limited) controls 75-100% of shares and voting rights, which may limit governance transparency and minority protections.
• Limited Operating History: Incorporated in early 2023 with only 10 months of trading, the company’s operational sustainability and revenue consistency cannot yet be reliably assessed.

3. Positive Indicators:

• Strong Asset Base: Significant fixed financial assets (£65.74M) provide a solid backing of resources.
• Profitability Reported: Profit before tax of £3.64M for the initial period suggests early operational success or returns on investments.
• Timely Compliance: No overdue filings; accounts and confirmation statements are up to date, indicating good regulatory compliance.

4. Due Diligence Notes:

• Clarify current assets/liabilities detail: The reported net current assets figure conflicts with line items; investigate working capital composition and classification of liabilities.
• Nature of Financial Assets: Understand the composition and liquidity of the £65.74M financial assets to assess solvency and potential for cash generation.
• Related Party Transactions: Review transactions with controlling shareholder and directors for potential conflicts or risks.
• Director Changes and PSC Consistency: Confirm the impact of director resignations in late 2024 and the current governance structure.
• Operational Model: Given the company is a holding entity, assess subsidiary operations and their financial health to gauge overall business sustainability.