GENUINE TECHNOLOGIES LTD

Executive Summary

GENUINE TECHNOLOGIES LTD is currently facing high financial risk characterized by significant negative net assets and increased liabilities, raising concerns about its solvency and liquidity. While the company maintains regulatory compliance and holds a reasonable cash position, the deteriorating financial position warrants thorough due diligence on creditor obligations and operational viability. Immediate attention should be given to understanding the company's cash flow and plans to address capital deficiencies to assess investment suitability.

GENUINE TECHNOLOGIES LTD - Analysis Report

Company Number: 14849722

Analysis Date: 2025-07-29 20:25 UTC

1. Risk Rating: HIGH
   GENUINE TECHNOLOGIES LTD demonstrates significant solvency and liquidity risks indicated by negative net assets and net current liabilities as at 31 August 2024. The company's shareholders’ funds have deteriorated substantially over one year, suggesting financial distress and potential inability to meet obligations.

2. Key Concerns:

• Negative Net Assets and Shareholders’ Funds: The company’s net assets declined from -£55,576 in 2023 to -£173,772 in 2024, with shareholders’ funds worsening from -£55,676 to -£398,870, indicating accumulated losses and erosion of capital.
• High Current and Long-Term Liabilities: Current liabilities jumped to £94,244 from £11,470 the prior year, while creditors due after one year doubled to £229,300, exerting pressure on cash flow and solvency.
• Negative Net Current Assets (Working Capital Deficit): The company reported net current liabilities of £2,454, which could indicate difficulties in meeting short-term debts despite holding cash of £45,179, highlighting liquidity concerns.

3. Positive Indicators:

• Increasing Current Assets and Cash Position: Current assets increased substantially from £13,792 to £91,790, including a cash balance of £45,179 as of August 2024, which could provide some short-term liquidity buffer.
• Intangible Assets Stability: Intangible assets remained steady at £55,000, reflecting some invested value in software or IP relevant to its IT consultancy and software development activities.
• No Overdue Filings or Compliance Issues: Accounts and confirmation statements are filed on time with no overdue filings, indicating regulatory compliance and good governance practices.

4. Due Diligence Notes:

• Examine Nature and Terms of Creditors: Investigate the composition of both current and long-term creditors, particularly the large increase in long-term liabilities (£229,300) to assess repayment terms and any potential restructuring risks.
• Review Cash Flow Statements: Obtain detailed cash flow data to evaluate operational cash generation and the company’s ability to service its liabilities.
• Understand Business Model and Revenue Trends: Assess revenue streams, contract pipeline, and profit margins to evaluate the sustainability of the business given the accumulated losses.
• Director and Management Background: Verify any director conduct records or related party transactions given sole control by one director, to ensure no conflicts or risks related to governance.
• Consider Going Concern Disclosures: Clarify if management has provided any indication or plans addressing the negative equity and working capital deficit.