DUNCAN TURNER LIMITED
Company number 04279126 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Commercial Credit Assessment: DUNCAN TURNER LIMITED
1. Credit Opinion: CONDITIONAL
The company demonstrates a long trading history (incorporated 2001) and has grown net assets by 41% in the latest year. However, the balance sheet has undergone significant structural change, with current liabilities increasing fourfold while cash has declined by 61%. The rapid expansion appears debt-funded rather than cash-generated, creating liquidity vulnerability. Credit facilities should be considered on a conditional basis, with appropriate covenants around cash flow coverage and working capital management.
Key concern: The dramatic shift in the balance sheet composition—stocks up 365%, trade debtors up 279%, bank borrowings up from £4,320 to £75,000—suggests a significant change in the business model or a major expansion that has yet to demonstrate sustainable cash generation.
2. Financial Strength
Balance Sheet Summary (2024 vs 2023):
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Fixed Assets | £107,456 | £47,601 | +126% |
| Current Assets | £347,397 | £174,016 | +100% |
| Current Liabilities | £277,088 | £69,500 | +299% |
| Net Current Assets | £70,309 | £104,516 | -33% |
| Long-term Debt | £23,500 | £42,718 | -45% |
| Net Assets | £154,265 | £109,399 | +41% |
Positive indicators: - Net assets have grown consistently from the 2022 trough (£39,475) to £154,265 - Share capital maintained, with retained profits driving equity growth - Long-term debt has been reduced from £42,718 to £23,500 - Fixed asset investment of £73,200 demonstrates commitment to the business
Concerning indicators: - Current ratio has deteriorated from 2.50 to 1.25 - Quick ratio (excluding stock) stands at just 0.71—below the 1.0 threshold typically required - Cash represents only 13.9% of current assets, with working capital heavily reliant on debtors (46%) and stock (43%) - The "other creditors" balance of £182,000 (up from £55,482) requires clarification—it may include related-party balances or trade creditors that could strain cash flow
Historical volatility: The 2020-2021 period saw net assets spike to £453,913 before falling to £39,475 by 2022. This warrants explanation—it may reflect property revaluation, acquisition, or restructuring that impacts the reliability of trend analysis.
3. Cash Flow Assessment
Liquidity Position:
| Metric | Value | Assessment |
|---|---|---|
| Cash | £38,480 | Insufficient |
| Current Liabilities | £277,088 | High |
| Cash/Current Liabilities | 13.9% | Weak |
| Quick Ratio | 0.71 | Below threshold |
| Current Ratio | 1.25 | Marginal |
Cash flow concerns:
The company has invested heavily in fixed assets (£73,200 additions) and working capital (stocks +£117,151, debtors +£117,485) while cash has fallen from £99,735 to £38,480. This pattern is consistent with expansion funded by short-term borrowings, which creates a structural liquidity mismatch.
Bank borrowings analysis: - Short-term bank debt increased from £4,320 to £75,000 - Long-term bank debt decreased from £42,718 to £23,500 - Total bank debt: £98,500
The shift from long-term to short-term bank facilities is concerning. It suggests either refinancing on less favourable terms or increased reliance on overdraft/facility usage that could be called upon demand.
Working capital quality: - Stock represents 43% of current assets (£149,251)—this must convert to cash efficiently - Trade debtors represent 46% of current assets (£159,666)—collection discipline is critical - If either stock or debtors prove illiquid, the company will face cash pressure
Debt service capability: Without profit and loss data (directors have elected not to file), we cannot calculate interest coverage or debt service ratios. This is a material limitation. The increase in employees from 12 to 15 suggests revenue growth, but profitability cannot be confirmed.
4. Monitoring Points
Immediate priorities:
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Cash flow forecasting – The company must demonstrate that the expanded debtor book and stock levels will convert to cash in time to meet the substantially increased current liabilities. Request 13-week cash flow projections.
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Debtor aging analysis – With trade debtors at £159,666 (up 279%), obtain an aged debtor report to assess collection risk. Concentration of exposure to single customers would increase risk.
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Stock composition and turnover – Stock has increased from £32,100 to £149,251. Understand the nature of stock (perishable food items vs. longer-life products) and expected turnover rates. Given the SIC code covers food wholesale, obsolescence risk is material.
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"Other creditors" breakdown – The £182,000 balance (up from £55,482) requires explanation. Determine how much relates to trade creditors, related parties, accruals, or other obligations.
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Bank facility terms – Clarify the nature of the £75,000 short-term borrowing. Is this an overdraft facility or a term loan? What are the repayment terms and covenants?
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Related party transactions – The PSC register shows overlapping control structures (Parker Hampton Holdings Ltd, Turner Holdings (NE) Ltd, and multiple individuals all claiming 75%+ ownership). This requires clarification and may indicate inter-company balances that affect credit risk.
Ongoing monitoring:
- Current ratio maintenance above 1.2
- Cash position relative to current liabilities (target above 20%)
- Stock turnover ratios (quarterly review)
- Debtor days (monthly review)
- Filing compliance (currently satisfactory)