Company Number: 12968523

Analysis Date: 2025-07-29 16:15 UTC

1. Risk Rating: MEDIUM
   Justification: ERC Services Limited shows a significant improvement in net assets and working capital in the latest financial year, indicating enhanced solvency and liquidity. However, the presence of long-term creditors and previous periods of negative net current assets suggest some underlying financial stress historically. The company is a micro-entity with limited financial disclosures, which constrains a full assessment of operational stability.

2. Key Concerns:

• Long-term Liabilities: The company reports £41,889 of creditors falling due after more than one year, which is substantial relative to its size and warrants scrutiny on debt servicing capacity.
• Historical Liquidity Issues: Negative net current assets in early years (2020 and 2021) indicate past cash flow challenges that could impact operational continuity if recurring.
• Director Turnover: Multiple director resignations within a short period could suggest governance or operational instability, potentially impacting strategic direction and compliance oversight.

3. Positive Indicators:

• Improved Financial Position: Net assets increased from £310 in 2023 to £125,103 in 2024, with net current assets improving to £120,671, indicating stronger liquidity and solvency.
• Consistent Filing Compliance: No overdue accounts or confirmation statements, demonstrating regulatory compliance and good governance practices.
• Industry Focus: Established in roofing activities (SIC 43910), with a clear operational focus and a stable number of employees (1), consistent with micro-entity status.

4. Due Diligence Notes:

• Verify nature and terms of long-term creditors to assess repayment schedules and refinancing risks.
• Investigate reasons behind past liquidity shortages and confirm whether current cash flow is sustainable.
• Review the impact of director resignations on company strategy and compliance, including any potential related-party transactions or conflicts of interest.
• Obtain profit and loss details if possible, as they are not filed, to better understand profitability and operational performance.