D NUTTALL UK LTD

Risk Rating: MEDIUM

The company is solvent on a balance-sheet basis with positive net assets of £964,450 and positive working capital of £753,160 at 30 September 2025. However, the balance sheet is increasingly reliant on current liabilities, cash is modest relative to short-term obligations, and the accounts provide limited visibility into profitability and cash generation. These factors justify a MEDIUM risk rating rather than LOW.

1. Risk Rating

MEDIUM — The company meets its current obligations on paper, and its filing record is up to date, but liquidity headroom is thin relative to the scale of short-term liabilities, and key balances require further explanation.

2. Key Concerns

2.1 Increasing reliance on current liabilities

• Total liabilities have grown from approximately £482,000 in 2021 to £1,620,261 in 2025, while shareholders’ funds have remained broadly flat.
• Trade payables alone stood at £1,106,683 at 30 September 2025, more than double the company’s cash balance of £489,345.
• The cash-to-current-liabilities ratio is only around 30%, meaning the company depends on ongoing trading, customer collections, or supplier credit to settle obligations as they fall due.

2.2 Large and unexplained “other receivables”

• Other receivables of £1,261,106 represent roughly two-thirds of total receivables and over half of current assets.
• The accounts do not disclose the composition of this balance. If it includes loans to related parties, deposits, or amounts that are not readily collectible, the true liquidity position could be weaker than the headline current ratio of 1.46 suggests.

2.3 Limited visibility on profitability and a declining equity trend

• The accounts are prepared under the small companies exemption and do not include a profit and loss account or cash flow statement.
• Retained earnings fell from £969,874 in 2024 to £963,450 in 2025, and net assets have decreased from £1,160,692 in 2023 to £964,450 in 2025.
• Without the income statement, it is not possible to determine whether this reflects trading losses, dividends, or a combination of both.

3. Positive Indicators

• Solvent balance sheet: Net assets of £964,450 and net current assets of £753,160.
• Cash position improved year-on-year: Cash and cash equivalents rose from £418,422 in 2024 to £489,345 in 2025.
• Filing compliance appears current: Accounts to 30 September 2025 are filed, and the confirmation statement is up to date with no overdue filings indicated.
• Established operating history: The company has been active since 2008 and has grown total assets from around £121,000 in 2014 to £2.37 million in 2025.
• No insolvency markers: The company is not in liquidation, administration, or receivership.

4. Due Diligence Notes

Before placing reliance on these accounts, an investor should investigate the following:

• Obtain management accounts for the period after 30 September 2025 to assess revenue trends, gross margin, and cash conversion.
• Request a full breakdown of other receivables of £1,261,106, including whether any amounts are due from connected parties and their expected repayment dates.
• Review the ageing profile of trade receivables (£622,970) and trade payables (£1,106,683) to understand collection and payment cycles.
• Clarify the composition of other payables (£464,503), particularly whether any balances are due to the director or connected entities.
• Verify the absence of financial data for the years 2017–2019 in the supplied history; this may be a data limitation, but it should be confirmed that no filings were missed.
• Confirm the level of undrawn bank facilities or overdraft headroom, given the relatively low cash-to-liabilities ratio.
• Assess key-person risk: the company has a single director and sole significant shareholder controlling more than 75% of the shares, so governance and succession arrangements should be reviewed.