HERSTEL LTD
Company number 07733431 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Credit Analysis: HERSTEL LTD
1. Credit Opinion: DECLINE
Reasoning: This application must be declined on multiple fundamental grounds. The company is currently subject to a proposal to strike off the Companies House register, meaning it is in the process of being dissolved. Extending credit to an entity facing dissolution carries unacceptable risk of non-repayment. Additionally, the company is technically insolvent with negative net assets of £46,651, has virtually no liquid assets (£11 in current assets), and demonstrates no evidence of ongoing trading activity or revenue generation.
2. Financial Strength: Critical Weakness
The balance sheet reveals a severely distressed position:
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Net Assets | (£46,651) | (£46,149) | (£45,671) |
| Current Assets | £11 | £11 | - |
| Current Liabilities | (£359) | (£4,225) | - |
| Long-term Liabilities | (£46,303) | (£41,935) | (£41,935) |
Key observations: - Technical insolvency: Liabilities exceed assets by £46,651. The company cannot cover its obligations from its balance sheet. - Deteriorating trajectory: Net assets have worsened from (£13,920) in 2018 to (£46,651) in 2024 – a decline of over £32,000 in negative equity. - Minimal asset base: Just £11 in current assets provides zero cushion for any creditor claims. - Long-term creditor dependency: The £46,303 in creditors due after one year likely represents director loans or related-party obligations, but without full accounts disclosure, this cannot be confirmed.
3. Cash Flow Assessment: Non-Existent Liquidity
- Working capital: Negative at (£348) – the company cannot meet its immediate obligations from current assets
- Current assets of £11 are negligible and insufficient to cover even the £359 due within one year
- Zero employees and "no description of principal activity" in the accounts suggests the company is not generating revenue
- No turnover figures available due to micro-entity filing, but the absence of any trading description is concerning
The company appears to be a dormant or quasi-dormant shell with no operating cash flow to service debt.
4. Monitoring Points
Should any existing exposure exist (which should be immediately reviewed):
| Risk Factor | Detail | Severity |
|---|---|---|
| Strike-off action | Company is being removed from the register – any credit extended would likely be unrecoverable | CRITICAL |
| Insolvency | Negative net assets of £46,651 mean creditors rank behind all liabilities with no asset coverage | CRITICAL |
| No PSC registered | Only a PSC statement is filed, not actual beneficial owner details – potential compliance failure | HIGH |
| Single director | No board depth; key-person dependency with no governance oversight | MEDIUM |
| Long-term liability growth | Long-term creditors increased from £41,935 to £46,303 (+£4,368) in 2024 without corresponding asset growth | HIGH |
Additional Concerns
- SIC Code 80300 (Investigation activities): No evidence this business activity is being pursued
- Micro-entity accounts: Minimal disclosure prevents full assessment of creditor composition, related-party transactions, or contingent liabilities
- Director responsibility: Cameron McKenzie is the sole officer; no secretary is currently appointed