DIRECT CONNECT ELECTRICAL LTD

Executive Summary

Direct Connect Electrical Ltd, a recently formed micro-entity in electrical installation, currently faces high risk due to negative working capital and shareholders’ funds, indicating weak liquidity and solvency. While regulatory compliance is maintained and directors possess relevant industry experience, the company’s lack of operational history and negative equity warrant careful scrutiny of its funding and business viability. Further due diligence on cash flow and capitalization plans is essential before considering investment.

DIRECT CONNECT ELECTRICAL LTD - Analysis Report

Company Number: 14502316

Analysis Date: 2025-07-29 13:20 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity risks, as evidenced by its negative net current assets and shareholders' funds. These indicators suggest it is currently unable to meet short-term obligations without additional financing.

2. Key Concerns:

• Negative Working Capital: With current liabilities (£1,330) exceeding current assets (£207), the company has a net current liability position of £1,123, indicating potential liquidity issues.
• Negative Shareholders’ Funds: Shareholders’ funds stand at -£1,123, reflecting accumulated losses or insufficient capital injection, posing solvency risk.
• No Employees or Operational History: The company has zero employees and was incorporated in late 2022, with its first financial period ending November 2023. This limited operational history and scale raise concerns about business sustainability and revenue generation capability.

3. Positive Indicators:

• Compliance With Filing Requirements: The company is up to date with both accounts and confirmation statement filings, indicating sound regulatory compliance and governance.
• Directors with Relevant Occupation: Both directors are electricians by occupation, suggesting industry knowledge relevant to the electrical installation SIC code (43210).
• No Indication of Insolvency Proceedings: The company is active and not in liquidation, administration, or receivership as of the latest data.

4. Due Diligence Notes:

• Investigate Cash Flow Sources: Clarify how the company plans to address its negative working capital and fund ongoing operations given minimal current assets.
• Review Business Model and Contracts: Assess the company’s client base, contracts, or pipeline to evaluate future revenue prospects and operational sustainability.
• Examine Capital Structure and Funding: Determine if additional capital injections or loans are expected or have been arranged to correct the negative equity position.
• Confirm Directors’ Backgrounds: Verify absence of any director disqualifications or adverse conduct records that may impact governance or risk profile.