Company Number: 13951545

Analysis Date: 2025-07-20 13:49 UTC

1. Credit Opinion: APPROVE with conditions.
   FTS Recovery Limited is a young but growing company incorporated in 2022, operating in accounting and auditing activities (SIC 69201). The company shows strong growth in net current assets and shareholders’ funds from £104k in 2023 to £790k in 2024, indicating improving financial health. However, being a relatively new entity with limited trading history and no audited accounts, some caution is warranted. Approval is recommended subject to ongoing monitoring of cash flow and receivables performance, given the large increase in debtors.

2. Financial Strength:
   The balance sheet reveals a robust improvement over the last year. Current assets have increased substantially from £882k to nearly £1.85M, driven mainly by debtors rising from £826k to £1.44M and cash increasing from £55.5k to £410k. Current liabilities also rose but at a slower rate, from £785k to £1.06M, resulting in net current assets improving from £97k to £785k. Shareholders’ funds grew almost eightfold to £790k, reflecting accumulated profits or capital injections. Fixed assets remain minimal (~£6k net), typical for the sector. The capital structure is equity-heavy with negligible debt, which supports financial resilience.

3. Cash Flow Assessment:
   Cash on hand increased significantly, which supports liquidity. However, trade debtors represent a large portion of current assets (£113k out of £1.44M), with other debtors making up the remainder. Close attention should be paid to the quality and collectability of these debtors to avoid liquidity risk. Current liabilities include a sizeable taxation and social security balance (£547k), which must be managed carefully to prevent payment delays. Working capital is solidly positive, but cash flow monitoring is crucial as the company scales.

4. Monitoring Points:

• Debtor aging and collection efficiency, since elevated receivables could strain liquidity if not converted timely.
• Tax liabilities and social security payments to ensure compliance and avoid enforcement actions.
• Continued profitability and cash generation given the company’s growth phase.
• Stability of management and corporate governance, noting multiple directors and a corporate director appointed recently but scheduled to resign shortly.
• Any changes in related party transactions, as management charges have decreased substantially from the prior year, potentially impacting costs and cash flow.