HATCHLET INNOVATIONS LTD

Executive Summary

Hatchlet Innovations Ltd is a small, active private limited company engaged in software development, maintaining positive net assets but showing signs of liquidity tightening and reduced equity. The company complies with filing requirements and has stable management but exhibits some cash flow and receivables concerns requiring further investigation. Overall, the risk profile is medium, warranting close monitoring of operational cash flows and debtor quality.

HATCHLET INNOVATIONS LTD - Analysis Report

Company Number: 12924397

Analysis Date: 2025-07-29 20:08 UTC

1. Risk Rating: MEDIUM
   Hatchlet Innovations Ltd shows modest net assets and positive shareholders’ funds but exhibits a declining trend in liquidity and net assets from 2023 to 2024. The company is small, with limited capital and a narrow cash buffer, which raises concerns about its ability to absorb shocks or unexpected expenses. However, there is no indication of overdue filings or insolvency proceedings.

2. Key Concerns:

• Declining Working Capital: Current assets decreased from £5,551 in 2023 to £3,847 in 2024, while current liabilities decreased less sharply, leading to a reduction in net assets from £4,042 to £2,654. This signals potential liquidity tightening.
• Concentration of Debtors: The significant drop in trade debtors (from £3,745 in 2023 to £0 in 2024) offset by an increase in other debtors raises questions about the nature and collectability of receivables.
• Limited Share Capital and Equity Base: With only £100 in share capital and relatively low retained earnings, the company’s equity base is thin, which may limit its financial flexibility and resilience.

3. Positive Indicators:

• Positive Net Assets and Shareholders’ Funds: Despite reductions, the company maintains positive net assets and equity, indicating solvency at the balance sheet date.
• No Overdue Filings or Compliance Issues: Accounts and confirmation statements are up to date, reflecting good regulatory compliance and governance discipline.
• Stable Employment and Director Structure: The company employs four people consistently and has a stable board of four directors with no noted disqualifications or governance flags.

4. Due Diligence Notes:

• Examine Cash Flow Statements and Profit & Loss: These were not provided but are critical to understand operational cash generation, revenue trends, and profitability.
• Clarify Composition of ‘Other Debtors’: Investigate what constitutes other debtors (£1,087 in 2024) and assess collectability risk.
• Review Contractual Revenue Sources and Client Concentration: As a business software developer, dependence on a limited number of clients or contracts could pose risk.
• Assess Capital Raising or Financing Plans: Given the small equity base and declining net assets, determine if the company plans to raise additional capital or secure financing to support growth or working capital needs.