DAVTECH HANDLING LTD

Executive Summary

Davtech Handling Ltd is an active small private company operating in machinery repair with increasing debtor balances but deteriorating liquidity and net asset position as of its 2024 year-end. While regulatory compliance is maintained, the company faces medium solvency risk due to negative working capital and rising liabilities. Further due diligence into cash flow, creditor terms, and financial sustainability is advised before investment consideration.

DAVTECH HANDLING LTD - Analysis Report

Company Number: 12833455

Analysis Date: 2025-07-20 15:38 UTC

1. Risk Rating: MEDIUM
   The company shows a significant deterioration in liquidity as evidenced by negative net current assets in the latest financial year, combined with very low net assets. While still active and compliant with filings, the financial position suggests some short-term solvency pressure.

2. Key Concerns:

• Liquidity strain: The net current assets declined to -£4,723 in 2024 from a positive £130 in 2023, indicating potential cash flow constraints.
• Low net assets and shareholders’ funds: Net assets dropped sharply from £5,354 in 2023 to £21 in 2024, which is a material decline and raises concern over capital adequacy.
• Increased short-term liabilities: Current liabilities increased by about 46% year-on-year, particularly trade creditors and taxation/social security, which could indicate operational cash flow challenges.

3. Positive Indicators:

• Timely compliance: The company is up to date with its accounts and confirmation statement filings, indicating good regulatory compliance.
• Established customer base: Trade debtors have nearly doubled from £12,952 to £24,196, suggesting increased sales or receivables growth.
• Tangible fixed assets maintained: The company owns tangible assets (motor vehicles and office equipment) with a net book value of approximately £21,000, which supports operational capacity.

4. Due Diligence Notes:

• Investigate the reasons behind the sharp decline in net assets and current liquidity, including any recent expenses, credit management issues, or write-downs.
• Review cash flow statements and payment terms with creditors and debtors to assess working capital management.
• Confirm whether there are any contingent liabilities or off-balance sheet obligations not disclosed in the accounts.
• Understand the company's revenue trends and profitability given the absence of an income statement in the filings.
• Assess the impact of hire purchase liabilities, which represent a significant portion of both current and long-term creditors.