Risk Analysis: DATASHARP UK LIMITED

1. Risk Rating: LOW

Justification: The company demonstrates consistent solvency with net assets exceeding £1 million across all reported periods, a strong cash position (£1.24M representing 70% of current assets), and no overdue filings. The primary consideration is the apparent recent acquisition by Focus Group, which introduces group-related dependencies but does not, in itself, elevate the risk profile to concerning levels for a company with this financial foundation.

2. Key Concerns

Concern 1: Contracting Balance Sheet

Total assets have declined from £2.39M (2019) to £1.76M (2024), a 26% reduction over five years. Cash has fallen from £1.61M (2023) to £1.24M (2024) alone—a £367K reduction. While liabilities have also decreased, the consistent erosion of the asset base warrants examination to determine whether this reflects deliberate restructuring post-acquisition or underlying trading deterioration.

Concern 2: Inter-Company Balances and Group Dependencies

A new £150,000 debtor from "group undertakings" appeared in 2024 (nil in 2023), indicating the company is now funding or being funded by group entities. Additionally, other creditors reduced dramatically from £863K to £398K. The ultimate controlling party is disclosed as Shoreham Topco Limited, while the PSC register lists Focus 4 U Ltd (75%+), Datasharp (Holdings) Limited (50-75%), and Js2 Investments Limited (50-75%). The overlapping PSC percentages are inconsistent—three entities cannot each hold 50%+ of shares. This suggests the PSC register may not have been updated following the acquisition by Focus Group, which is a governance concern.

Concern 3: Revenue and Profitability Opacity

As a small company filing under Section 1A FRS 102, the income statement is not delivered. With 47 employees and a balance sheet of this size, the company likely has turnover well below the £10.2M threshold, but profitability cannot be assessed. The retained earnings increased by only £14,686 (from £1,011,819 to £1,026,505), suggesting marginal profitability at best, or possibly losses offset by other comprehensive income adjustments.

3. Positive Indicators

• Established Business: Incorporated in 1984, the company has 40 years of operating history, demonstrating long-term resilience.
• Strong Liquidity Position: Net current assets of £1M and a cash balance of £1.24M against current liabilities of £762K provides a healthy current ratio of approximately 2.3:1.
• Consistent Positive Net Assets: Shareholders' funds have remained above £1M throughout the entire eight-year reporting period, with no years of net liability position.
• Compliant Filing Record: Accounts and confirmation statements are current with no overdue items. The accounts were approved and signed promptly (year-end 31 March 2024, signed 15 May 2024).
• Liability Reduction: Total liabilities decreased by 38% year-on-year (from £1.23M to £762K), improving the overall financial position.
• Going Concern Affirmation: Directors have explicitly confirmed a reasonable expectation of adequate resources to continue in operational existence.

4. Due Diligence Notes