HARMONY ENERGY ADVISORS LIMITED

Executive Summary

Harmony Energy Advisors Limited has demonstrated rapid growth and strong profitability in its early years, supported by a robust balance sheet and positive cash position. The company’s financials and governance present a low credit risk profile suitable for credit approval. Key attention should be given to monitoring debtor balances and cash conversion to maintain liquidity as the business expands.

HARMONY ENERGY ADVISORS LIMITED - Analysis Report

Company Number: 13538492

Analysis Date: 2025-07-20 16:50 UTC

1. Credit Opinion: APPROVE
   Harmony Energy Advisors Limited shows strong financial growth and profitability since incorporation in 2021. The company’s turnover increased significantly from £309k in 2021 to over £2.09m in 2022, with a healthy operating profit margin. The directors have demonstrated sound financial stewardship, supported by an unqualified audit opinion from a reputable auditor. No overdue filings or director disqualifications are noted, and ownership control is clear and stable. These factors indicate a good ability to service debt and meet commercial obligations.

2. Financial Strength:
   The company’s balance sheet as at 31 December 2022 reflects solid financial health for a small private limited company. Net assets increased substantially from £208k in 2021 to £1.69m in 2022, primarily driven by a large increase in non-current debtor balances (£1.52m) which may represent amounts due from related parties or long-term contracts. Current assets of £721k comfortably cover current liabilities of £551k, yielding positive net current assets of £171k, indicating adequate short-term liquidity. Shareholders’ funds are strong relative to capital employed, with retained profits accounting for the majority of equity.

3. Cash Flow Assessment:
   Cash at bank improved to £495k in 2022 from nil in 2021, supporting operational liquidity. The increase in debtors (both current and long-term) requires monitoring to ensure timely collection, as significant debtor balances can strain cash flow if not converted promptly. Positive operating profit and tax payments indicate the company generates sufficient internal cash to sustain operations. Working capital is positive, but the sizeable current liabilities nearing £551k should be tracked.

4. Monitoring Points:

• Debtor aging and collectability, especially the large non-current debtor balance, to ensure this does not impair liquidity.
• Continued revenue growth and margin maintenance as the company scales operations.
• Cash flow management to handle working capital needs and any potential capital expenditure related to renewable energy projects.
• Any changes in ownership or director appointments which could affect governance or financial control.
• Market and regulatory risks in the renewable energy sector that could impact future earnings and creditworthiness.