FRANCIS CAMPBELL LIMITED
Company number SC334461 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Risk Assessment: FRANCIS CAMPBELL LIMITED
1. Risk Rating: HIGH
The company presents HIGH risk based on persistent and deepening technical insolvency over multiple years, severely impaired liquidity, and net current liabilities that dwarf any reasonable expectation of short-term recovery. The business has operated with negative shareholders' funds for seven consecutive years, with the deficit reaching £86,193 as at 30 November 2024—representing total liabilities approximately 2.66 times total assets.
2. Key Concerns
Concern 1: Technical Insolvency and Deteriorating Capital Position
Shareholders' funds have been negative since 2017, deteriorating from -£20,484 to -£86,193 over seven years. The 2024 balance sheet shows total liabilities of £137,965 against total assets of only £51,774. The company is balance-sheet insolvent by a significant and widening margin. Continued trading in this condition relies entirely on creditor forbearance and/or director support.
Concern 2: Severe Liquidity Crisis
Net current liabilities stand at £108,697 (2024), with current liabilities of £137,965 massively exceeding current assets of £29,268. The current ratio is approximately 0.21:1—far below any threshold considered viable. Cash of £8,321 provides minimal buffer against creditor demands. The business is entirely dependent on creditors not demanding payment within normal terms.
Concern 3: Volatile and Depleted Cash Position
Cash reserves have been highly erratic: £86,476 (2020), £67,035 (2021), then collapsing to £2,253 (2022), before modest recovery to £8,321 (2024). The 2020-2021 spike likely reflects COVID-19 support funding (Bounce Back Loans or similar), which has since been substantially consumed. The underlying cash generation capacity appears extremely weak.
3. Positive Indicators
- Slight improvement in 2024: Shareholders' funds improved from -£92,564 to -£86,193 (a £6,371 improvement), and cash increased from £5,013 to £8,321, suggesting a marginal reduction in the rate of deterioration.
- Regulatory compliance: Accounts and confirmation statements are filed on time with no overdue items. The company has maintained active status throughout its difficulties.
- Longevity: The company has traded for 17 years, including multiple years of negative equity, suggesting creditor/director willingness to sustain operations.
- Consistent employment: The company has maintained 3 employees consistently, indicating operational continuity.
4. Due Diligence Notes
| Item | Details |
|---|---|
| Creditor composition | The balance sheet shows £137,965 in creditors due within one year, but the breakdown is not available in abridged accounts. Investigation should determine how much relates to director loans versus trade creditors versus HMRC versus COVID borrowing. Director loans would be more patient capital. |
| Going concern basis | No going concern qualification or note is visible in the filed accounts. Given the severity of the balance sheet position, the basis upon which the directors consider the company a going concern should be explicitly examined. Directors may be providing undertakings not to seek repayment. |
| COVID borrowing | The dramatic cash increase in 2020-2021 and subsequent depletion strongly suggests government-backed lending. Any Bounce Back Loan (£50k maximum) or CBILS would rank as preferential debt and may explain the creditor build-up. The status of any such borrowing should be confirmed. |
| Stock valuation | Stock increased from £8,250 to £16,664—a 102% increase. For an internet/mail-order retailer, this could indicate slow-moving or obsolete inventory. The stock valuation policy (lower of cost and NRV) should be scrutinised for overvaluation risk. |
| Income statement unavailable | The company has elected not to file its Income Statement (permitted under Section 444). Without turnover, gross margin, and operating profit data, it is impossible to assess whether the business is operationally profitable before debt service costs. Profitability of the underlying trading activity is a critical unknown. |
| Director loan accounts | Given the negative equity position, it is highly likely that directors have advanced funds. The nature, terms, and security of any such loans should be investigated, as they may represent both the mechanism enabling continued trading and a potential obstacle to any creditor recovery. |
| Debtor reduction | Debtors halved from £9,025 to £4,283. This may indicate improved collections or alternatively a reduction in credit sales—either interpretation has implications for the business model's viability. |