H. H. PLASTICS LIMITED

1. Risk Rating: LOW

Justification: The company exhibits a strong and improving net asset position, having grown net assets from £139,758 in 2020 to £600,988 in 2025. Total liabilities have been significantly reduced over the same period, dropping from over £1 million to £698,809. The company is solvent, currently trading profitably (evidenced by growing retained earnings), and filing requirements are up to date. While some data inconsistencies exist in governance records, the underlying financial stability suggests low solvency risk.

2. Key Concerns

• PSC Data Inconsistencies: The People with Significant Control register presents contradictory ownership data. Mr. Graham John Evans is listed as owning more than 75% of shares and voting rights, while Ms. Clair Machin is listed as owning 50-75%, and Cotswold Investment Club Limited owns more than 75% of shares and voting rights. These percentages mathematically exceed 100%, indicating either a significant filing error or a misunderstanding of the share structure, which poses a corporate governance concern.
• Liquidity Quality: While net current assets are positive at £432,657, this figure is heavily reliant on debtors (£635,990) and stock (£417,512). Cash at bank stands at only £77,964. If the company experiences delays in debtor collections or faces inventory obsolescence, its immediate liquidity position could become strained despite the healthy current ratio.
• Officer Record Anomalies: The officer data lists Clair Elise Machin as both a resigned secretary (2026-06-30) and a current secretary with "NATIONALITY UNKNOWN," in addition to being a current director. The future resignation date and duplicate entries suggest administrative errors or data syncing issues with Companies House, which, while minor, reflects on internal governance hygiene.

3. Positive Indicators

• Strong Deleveraging Trend: The company has systematically reduced its total liabilities from £1,112,829 in 2016 to £698,809 in 2025. This sustained reduction in debt lowers financial risk and reduces interest burden.
• Retained Earnings Growth: Shareholders' funds have grown substantially, driven entirely by retained profits (P&L reserve grew from £101,853 in 2016 to £600,889 in 2025 against a constant £99 share capital). This indicates consistent operational profitability and cash generation.
• Operational Longevity and Stability: Incorporated in 1979, the business has a long trading history. The average employee count has remained stable (32 in 2025 vs. 31 in 2024), and the company successfully navigated the pandemic period with an increase in net assets from 2020 to 2021, suggesting a resilient business model.

4. Due Diligence Notes

• Clarify Share Structure: Immediately request the full share structure and register of members to resolve the PSC discrepancies. Determine if there are different share classes (e.g., Alphabet shares) that explain the overlapping voting rights and ownership percentages.
• Debtors Analysis: Obtain the aged debtors schedule to assess the collectability of the £635,990 debtors figure. Determine the typical payment terms and the level of provisions for bad debts.
• Inventory Valuation: Request a breakdown of the £417,512 stock figure. Given the company's SIC code (Manufacture of paper/paperboard articles), assess the risk of raw material price volatility or finished goods obsolescence.
• Finance Lease Commitments: The accounts note includes assets held under finance leases, but the abridged nature of the filings obscures the total future lease commitments. Obtain the full lease schedule to understand the impact on future cash flows.
• Verify Officer Status: Confirm the current legal status and appointments of the directors and the secretary directly with the company to resolve the conflicting Companies House data regarding the secretary's resignation and nationality.