Company Number: 12992524

Analysis Date: 2025-07-29 15:40 UTC

1. Risk Rating: LOW

Justification: Finafrik Ltd presents a solid balance sheet with strong net assets (£2.12m as of 31 Dec 2022) well in excess of current liabilities (£70.6k). The company shows positive net current assets and shareholders’ funds, no overdue filings, and active operational status. The absence of audit requirements under the small companies regime is consistent with its size and does not in itself pose a risk. Overall, the financial position and compliance record suggest low risk.

2. Key Concerns:

• Decline in current assets: Current assets decreased significantly from £677.7k (2021) to £329.5k (2022), primarily due to a reduction in debtors from £441.6k to £2.6k. This may reflect a change in revenue recognition or client base and warrants review.
• Increasing current liabilities: Current liabilities nearly doubled from £36.1k (2021) to £70.6k (2022), mostly trade and other creditors. While still modest, the increase requires monitoring to ensure payables remain manageable.
• Operating losses: The income statement shows accumulated losses (£42.8k), with a worsening position from the prior year (£13.2k). This indicates the business is not yet profitable and reliant on capital or external funding.

3. Positive Indicators:

• Strong net assets and equity base: Shareholders’ funds remain robust at over £2.1 million, providing a cushion for operational losses.
• Healthy cash position: Cash at bank increased from £236k (2021) to £327k (2022), supporting liquidity.
• No overdue statutory filings: Accounts and confirmation statements are filed on time, indicating good governance.
• Investment in subsidiaries: The company holds significant investments (£1.32m) in a fintech subsidiary, suggesting strategic growth focus.
• Low employee count (2) reduces fixed overhead costs.

4. Due Diligence Notes:

• Investigate reason for large drop in debtors from 2021 to 2022 and if this impacts revenue sustainability.
• Review detailed income statement and cash flow (not filed publicly) to understand sources of losses and funding plans.
• Assess credit terms and supplier relationships due to increased current liabilities.
• Confirm status and performance of subsidiary Maviance PLC, including any impairment risks.
• Verify directors’ background and governance practices; no red flags noted but cross-check with insolvency/disqualification registers.
• Evaluate amortisation policy and impairment testing over intangible assets (not amortised yet).