GMX HEATING LIMITED

Executive Summary

GMX Heating Limited demonstrates a weak financial position characterized by minimal net assets and persistent negative working capital, indicating liquidity challenges and limited ability to service debt. Given the company's micro size, short trading history, and deteriorating balance sheet, extending credit without significant safeguards carries high risk. Ongoing monitoring of liquidity and management actions is essential if credit is considered in the future.

GMX HEATING LIMITED - Analysis Report

Company Number: 14114551

Analysis Date: 2025-07-20 14:40 UTC

1. Credit Opinion: DECLINE
   GMX Heating Limited is a recently incorporated micro-entity in the plumbing and heating installation sector with limited financial history. The latest financials show a net asset base of only £30 and persistent net current liabilities of around £3,600, indicating weak liquidity and working capital deficits. The company’s declining total assets less current liabilities (from £13,330 to £9,275) and increasing creditor obligations suggest deteriorating financial health. Given the minimal equity cushion, negative working capital, and absence of profitability or cash flow data supporting debt servicing, the risk of default is elevated. The business lacks financial resilience and scale, and there is no evidence of strong management financial stewardship that might mitigate risk. Therefore, approval of credit facilities without substantial security or guarantees is not recommended.

2. Financial Strength:
   The balance sheet reveals very limited fixed assets (£12,884) and current assets (£7,304) compared to current liabilities of £10,913, resulting in net current liabilities of £3,609. The company’s net assets have nearly been eroded to a nominal £30, down from £199 the prior year, signaling near insolvency. Additionally, long-term creditors amount to £9,245, further burdening the company’s capital structure. The shareholder funds are negligible, indicating no retained earnings or capital injections to strengthen equity. The financial position appears fragile, with declining asset coverage and increasing creditor exposure.

3. Cash Flow Assessment:
   Negative net current assets indicate potential cash flow constraints and an inability to meet short-term obligations without external support. The company’s working capital position is weak, and without detailed cash flow statements, it is prudent to assume limited operational cash inflows relative to liabilities. The average number of employees increased only modestly from 1 to 2, which does not suggest rapid operational scaling that might improve cash flow. The absence of any audit or detailed profit and loss disclosures limits visibility but current indicators highlight liquidity risks.

4. Monitoring Points:

• Track net current assets and overall liquidity ratios closely each period to detect further deterioration.
• Monitor creditor aging and payment performance to assess short-term settlement ability.
• Review any changes in shareholder equity or capital injections that could improve financial strength.
• Observe management actions on cost control and business development to improve profitability and cash generation.
• Watch for timely filing of accounts and confirmation statements as compliance is currently up to date.