GEHLON & SONS SERVICES LTD

Executive Summary

GEHLON & SONS SERVICES LTD shows signs of financial stress, with significant liquidity challenges and elevated creditor levels relative to assets and equity. While regulatory compliance is up to date and asset investment is evident, the company’s negative working capital and small equity base present a high risk profile. Further detailed analysis of creditor terms and cash flow is recommended to fully assess operational viability.

GEHLON & SONS SERVICES LTD - Analysis Report

Company Number: 13117430

Analysis Date: 2025-07-20 14:29 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns, with net current liabilities worsening from -£4,153 in 2023 to -£30,083 in 2024, and a relatively small positive net asset base of £7,178. The substantial creditor balances falling due after one year (£84,932) further strain the financial position. These factors combined suggest elevated financial risk.

2. Key Concerns:

• Liquidity Deficit: Cash balances have declined from £49,069 in 2023 to £28,866 in 2024, while current liabilities have increased substantially to £58,949, indicating potential cash flow pressures to meet short-term obligations.
• High Long-Term Creditors: The existence of £84,932 in long-term creditors raises concerns about the company’s ability to service debt over time, especially given the limited equity cushion.
• Negative Working Capital Trend: The worsening net current assets position over two years signals deteriorating operational liquidity, which may impair ongoing operations without external support or restructuring.

3. Positive Indicators:

• Increasing Tangible Fixed Assets: Investment in motor vehicles increased significantly (from £57,693 to £122,193), indicating asset growth which may support operational capacity.
• No Overdue Filings: The company is current with both accounts and confirmation statement filings, suggesting regulatory compliance and good governance in this regard.
• Sole Director and PSC Stability: Mr. Sukhpreet Singh holds full control and has been consistent since incorporation, which may imply stable management oversight.

4. Due Diligence Notes:

• Investigate the nature and terms of the creditor balances, particularly the long-term creditors, to assess repayment schedules and any covenants that may affect solvency.
• Review cash flow statements and recent operational performance to evaluate the company’s ability to generate sufficient liquidity going forward.
• Assess the reason for the absence of depreciation on tangible fixed assets (motor vehicles) despite the company policy stating depreciation is provided, as this may affect asset valuation and profit/loss accuracy.
• Confirm the company's revenue trends and contract pipeline given the cargo handling SIC code to understand operational sustainability.
• Verify any contingent liabilities or off-balance sheet commitments not reflected in the filleted accounts.