EPEC ENGINEERED TECHNOLOGIES LIMITED

Executive Summary

EPEC Engineered Technologies Limited demonstrates solid financial health with growing equity and positive working capital, reflecting operational progress since its 2022 inception. While liquidity appears sound, a significant trade debtor balance and a rising corporation tax creditor warrant further review to ensure continued cash flow stability. Overall, the company presents a low-risk profile but should be monitored for debtor quality and tax obligations.

EPEC ENGINEERED TECHNOLOGIES LIMITED - Analysis Report

Company Number: 14123713

Analysis Date: 2025-07-29 15:06 UTC

1. Risk Rating: LOW
   This assessment is based on the company's positive net asset position, healthy net current assets, and consistent growth in shareholders' funds over a short operational period since incorporation in 2022. There are no indications of insolvency, overdue filings, or liquidation processes.

2. Key Concerns:

• Reliance on Trade Debtors: Debtors constitute a significant portion of current assets (£427k in 2024), nearly 58% of total current assets. This concentration poses some liquidity risk if collections slow.
• Tax Liability Increase: Corporation tax creditor increased markedly from £19.5k to £89k, requiring cash outflow management to meet obligations.
• Small Scale and Limited History: Incorporated in 2022 with only four employees and small asset base; the company’s ability to withstand economic shocks or scale operations remains unproven.

3. Positive Indicators:

• Strong Growth in Equity: Shareholders’ funds increased from £80,081 in 2023 to £381,147 in 2024, evidencing profitability and capital retention.
• Positive Working Capital: Net current assets improved substantially from £80k to £342k, indicating enhanced liquidity and operational capability.
• Compliance and Governance: No overdue accounts or confirmation statements, and the company has filed accounts with proper accounting standards (FRS 102).
• Operational Stability: The company employs a modest but stable workforce (4 employees) and has tangible fixed assets, supporting ongoing manufacturing activities.

4. Due Diligence Notes:

• Review debtor aging reports and credit control policies to assess the quality and collectability of trade debtors.
• Investigate the nature and timing of the corporation tax liability and ensure appropriate tax planning and cash flow forecasts are in place.
• Understand the customer base and contract terms given the significant debtor balance to evaluate revenue sustainability.
• Confirm any contingent liabilities or off-balance sheet commitments not disclosed in the accounts.
• Validate the board and management team experience given the company's recent incorporation and growth trajectory.