Company Number: 12993733

Analysis Date: 2025-07-20 14:27 UTC

1. Credit Opinion: APPROVE with conditions Exact Precision Engineering Limited demonstrates solid financial metrics with improving net assets and positive working capital. The company’s net assets increased from £505k in 2023 to £552k in 2024, indicating growth and retained profitability. Cash balances improved significantly to £161k, enhancing liquidity. However, the company carries a substantial finance lease and hire purchase obligation (£484k), which requires ongoing monitoring. Approval is recommended with conditions to maintain oversight on lease obligations and debtor collection.

2. Financial Strength: The company’s balance sheet is healthy for its size, with net assets of £551,941 and shareholders’ funds closely aligned, reflecting consistent equity growth. Fixed assets stand at £773,891, slightly down from the previous year but still substantial, indicating investment in plant and equipment relevant to its manufacturing activities (SIC 25110). Current assets exceed current liabilities by £287,942, showing comfortable short-term financial stability. Deferred tax liabilities have increased to £191,124, which is typical for companies with fixed assets and should be factored into future cash flow planning.

3. Cash Flow Assessment: Cash at bank increased significantly from £50,410 to £161,487, reflecting improved liquidity. Debtors are high (£1.01m) but stable year-on-year, with invoice financing secured against trade debts (£182k), mitigating some credit risk. Current liabilities increased moderately to £905k, largely driven by finance leases, trade creditors, and a director’s loan account (£217k). Net current assets remain positive, supporting working capital needs. The company’s cash flow appears sufficient to service current debt obligations, but careful management of debtor collections and lease payments is essential.

4. Monitoring Points:

• Monitor finance lease and hire purchase obligations closely, as these represent a significant medium to long-term liability (£484k).
• Track debtor ageing and invoice finance utilization to ensure timely cash conversion.
• Watch deferred tax developments and their impact on future cash flows.
• Keep an eye on operating results and profit margins, as the company has opted for small company accounts and does not publicly disclose profit and loss details.
• Review director loans and related party transactions for any material changes that may affect liquidity or governance.