CYGNUS TANKERS LIMITED

Executive Summary

Cygnus Tankers Limited demonstrates strengthening financial fundamentals with positive net assets and working capital improvements, supported by tangible fixed assets and cash reserves. However, reliance on related party transactions and recent ownership changes warrant ongoing monitoring of liquidity and operational performance. Conditional credit approval is advised, contingent on satisfactory cash flow management and confirmation of ongoing group support.

CYGNUS TANKERS LIMITED - Analysis Report

Company Number: 13214398

Analysis Date: 2025-07-20 16:16 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Cygnus Tankers Limited shows improving financial strength with positive net current assets and net assets growth year-on-year, indicating an improving balance sheet. However, significant amounts are owed by related parties and a high level of current liabilities relative to current assets, which may pose liquidity risks. The company is also newly reorganised with changes in ownership and management as of October 2024, and there has been reduced activity post year-end. Conditional approval is recommended, subject to monitoring of cash flow performance and confirmation of ongoing support from the ultimate parent and new owners.

2. Financial Strength:

• Net assets increased from £1.9m in 2023 to £1.97m in 2024, reflecting retained earnings growth and stable equity base.
• Tangible fixed assets are substantial (£1.6m), indicating investment in operational infrastructure.
• Current assets rose to £2.6m (up from £1.8m), driven by an increase in trade debtors (£1.7m vs £0.74m), which are largely balances due from related parties.
• Current liabilities also increased to £2.25m, mostly comprising monies owed to group undertakings and dividends payable (£951k).
• Share capital remains nominal at £100, meaning equity is primarily retained earnings.
• Deferred tax liabilities are minimal and expected to reverse within 48 months.

3. Cash Flow Assessment:

• Cash at bank declined from £1.09m in 2023 to £0.9m in 2024, a moderate reduction but still a strong cash balance for a small company.
• Net current assets improved to £361k, indicating working capital coverage of short-term liabilities.
• However, significant trade debtor balances are related party receivables, which may reduce liquidity if collection is delayed or impaired.
• Dividends payable of £951k at year-end reduce immediate liquidity and should be clarified.
• The company benefits from a letter of support from the parent company, enhancing its going concern position.

4. Monitoring Points:

• Closely monitor the ageing and collectability of related party receivables to ensure they do not impair liquidity.
• Track cash flow trends post year-end, especially given reported reduced activity following ownership changes.
• Review dividend payments and any new intercompany balances that may affect cash availability.
• Assess impact of management changes on operational performance and financial stewardship.
• Confirm continued support from the parent or ultimate beneficial owner, including any guarantees or financial backing.