FESTA SYSTEM UK LTD.

Executive Summary

FESTA SYSTEM UK LTD. demonstrates operational continuity and regulatory compliance with modest improvements in net assets over recent years. However, the company faces medium risk due to a working capital deficit and limited equity relative to liabilities, which could impact its short-term liquidity and solvency. Further investigation into creditor terms and cash flow is recommended to fully assess financial stability.

FESTA SYSTEM UK LTD. - Analysis Report

Company Number: 12557531

Analysis Date: 2025-07-20 15:19 UTC

1. Risk Rating: MEDIUM
   The company shows modest net assets and shareholder funds with a micro-entity classification. However, current liabilities exceed current assets, indicating a working capital deficit. The presence of long-term creditors and relatively thin equity buffers suggest some solvency and liquidity risks.

2. Key Concerns:

• Working Capital Deficit: Current liabilities (£2.35m) surpass current assets (£2.29m) as of 2024, resulting in negative net current assets, signaling potential short-term liquidity pressure.
• Long-Term Creditors: The company reported creditors falling due after more than one year (£48.5k), which may strain cash flow if not managed prudently.
• Modest Equity Base: Shareholder funds increased slightly to £111.8k but remain low relative to liabilities, limiting financial flexibility and resilience to adverse events.

3. Positive Indicators:

• Consistent Filing and Compliance: Recent accounts and confirmation statements are filed on time with no overdue status, indicating good regulatory compliance.
• Stable Employee Base: The company maintains a steady workforce of 9 employees, suggesting operational stability.
• Improved Net Assets: Net assets have increased from £96.7k in 2021 to £111.8k in 2024, reflecting slow but positive financial growth.

4. Due Diligence Notes:

• Review detailed creditor aging to assess the risk of overdue or defaulted payables and the nature of long-term creditor agreements.
• Analyze cash flow statements (not provided) to understand liquidity management and the ability to meet short-term obligations.
• Investigate the nature of fixed assets and any encumbrances or liens against them.
• Clarify ownership and control dynamics among PSCs, especially given changes and the presence of multiple directors with significant influence.
• Understand the business model and market position within the aluminium production sector, given the micro-entity status and relatively small asset base.