ELITA LABS LTD

Executive Summary

Elita Labs Ltd is a micro-entity with a very recent establishment and limited financial history. While it has improved its solvency and liquidity metrics in the latest financial year, the company remains small with modest net assets and working capital. Regulatory compliance is good, but the diversity of business activities and related party transactions merit further investigation to fully assess operational stability and financial risk.

ELITA LABS LTD - Analysis Report

Company Number: 14384976

Analysis Date: 2025-07-29 17:43 UTC

1. Risk Rating: MEDIUM
   The company shows recent improvement in net assets and working capital, moving from a net liability position to positive net assets. However, the absolute values remain small, and the company is very young (incorporated in late 2022) with limited financial history. The micro-entity status implies limited disclosure, which increases uncertainty.

2. Key Concerns:

• Historical Negative Net Assets: The company reported a net liability position (£-64) in its first two financial years, indicating initial losses or undercapitalization.
• Small Scale and Limited Financial Buffer: With net assets of only £9,308 and working capital of £8,795 as of September 2024, the company has a limited cushion against financial stress or unexpected liabilities.
• Concentration of Control: Two directors hold equal and significant control (each 25-50% shares and voting rights), which may create governance risk if disagreements arise, especially given their unrelated occupations (firefighter and builder) and the company's diverse SIC codes.

3. Positive Indicators:

• Improved Financial Position: The latest accounts show a positive net asset position and healthy net current assets, suggesting improved liquidity and solvency compared to prior years.
• Timely Filing and Compliance: Recent accounts and confirmation statements are filed on time, indicating good regulatory compliance and governance discipline.
• Stable Workforce: The company maintains a consistent average employee count of 2, which supports operational continuity.

4. Due Diligence Notes:

• Investigate the nature of related party transactions, specifically the director’s advances and repayment terms, to assess potential financial dependencies.
• Clarify the business model and revenue streams given the multiple SIC codes spanning diverse activities (landscape services, mail order retail, timber agents, and tool manufacturing). This will help evaluate operational focus and sustainability.
• Request management accounts or cash flow forecasts to assess ongoing liquidity beyond the static year-end balance sheet figures.
• Review any contingent liabilities or off-balance sheet obligations not disclosed in micro-entity accounts.