DROPWORKS CUSTOMS LTD

Executive Summary

Dropworks Customs Ltd is an early-stage micro-entity with positive but very modest profitability and a small asset base. The company currently has no liabilities and shows steady growth in turnover, but limited financial scale and single-person management present moderate credit risk. Conditional credit approval is recommended with low exposure limits and close monitoring of revenue trends and liquidity.

DROPWORKS CUSTOMS LTD - Analysis Report

Company Number: 13643814

Analysis Date: 2025-07-20 14:21 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Dropworks Customs Ltd is a very small micro-entity with limited turnover (£10.6k for the latest year) and minimal asset base (£1.5k net assets). The company is profitable but at a very modest scale. It has no current liabilities, indicating no immediate financial stress, but the low absolute size of operations and cash balances means it has limited buffer to absorb shocks. Credit should be extended cautiously, with conditions such as low exposure limits and regular monitoring given the early-stage nature of the business and its concentrated ownership.

2. Financial Strength:
   The balance sheet is extremely modest, reflecting a micro-sized business. Fixed assets increased from £500 to £1,200, showing a small capital investment, possibly in equipment or tooling. Current assets remain low at £300, with zero current liabilities, producing positive net current assets and net assets of £1,500. Shareholders’ funds have doubled in the past year, indicating retained earnings accumulation and no external debt. Overall, the company’s financial strength is weak due to scale but stable in terms of solvency.

3. Cash Flow Assessment:
   The company shows positive profitability (£736 in the latest year) with very low operating costs (staff costs £420, materials £1,576). Working capital is positive but very limited (£300). There is no sign of borrowing or creditor pressure. Liquidity risk is moderate because absolute cash and current asset values are small, and the company depends on generating continuing sales growth to maintain cash flow. The single employee structure and low fixed costs support a lean operation but limit scalability.

4. Monitoring Points:

• Revenue growth trajectory: the company’s turnover grew from £6.5k to £10.6k in one year, which is positive but should be tracked to ensure sustainability.
• Profit margins and cost control: monitor any increases in operating costs relative to turnover that could impact profitability.
• Working capital and liquidity: given the low absolute current asset base, careful monitoring of cash flow timing and any emerging liabilities is essential.
• Director and shareholder concentration: with one director and 75-100% ownership by Mr. Matsell, governance risks and dependency on a single individual should be considered.
• Filing compliance: current with accounts and confirmation statements, continue to ensure no late filings.