HEXCAM LIMITED
Company number 07891556 · 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: HEXCAM LIMITED
1. Credit Opinion: CONDITIONAL
The company demonstrates adequate balance sheet strength with net assets of £110,652 and positive working capital of £67,598. However, several factors warrant a conditional rating rather than outright approval:
- Related party exposure: £42,622 owed by group undertakings represents 34% of current assets and introduces dependency on the parent entity (StirlingX Limited) for cash realisation
- Rapid balance sheet expansion without proportional cash generation: Debtors grew 248% while cash declined from £46,859 to £41,155
- Recent change of control: Acquisition by StirlingX in February 2025 alters the risk profile and introduces group structure complexities
- Conflicting PSC register entries: Two corporate entities each claiming >75% ownership, plus individual holdings, raises governance concerns requiring clarification
Any credit facility should be conditional upon group guarantee support from StirlingX Limited and clarification of the intercompany position.
2. Financial Strength
Balance Sheet Summary (YE 30 September 2025):
| Item | 2025 | 2024 | Movement |
|---|---|---|---|
| Fixed Assets | £43,054 | £52,414 | -£9,360 |
| Current Assets | £125,115 | £70,952 | +£54,163 |
| Total Assets | £168,169 | £123,366 | +£44,803 |
| Current Liabilities | £57,517 | £22,333 | +£35,184 |
| Net Current Assets | £67,598 | £48,619 | +£18,979 |
| Net Assets | £110,652 | £101,033 | +£9,619 |
Key Observations:
- Gearing: The company is debt-free with no long-term liabilities. All liabilities are current, providing a clean capital structure
- Asset quality concerns: Current assets are heavily weighted towards debtors (£83,960 representing 67% of current assets). The recoverability of the group undertaking balance (£42,622) is dependent on parent company solvency
- Tangible net worth: £110,652 provides a reasonable equity base, though £42,622 (38%) is effectively deployed as an intercompany loan
- Fixed assets: Primarily plant/machinery (£34,468) and computer equipment (£8,481) — specialist drone and imaging equipment that may have limited resale value
- Profit retention: £9,619 profit retained in the year with nil dividends (versus £10,812 paid previously), suggesting management are reinvesting in the business
3. Cash Flow Assessment
Working Capital Position:
| Metric | 2025 | 2024 |
|---|---|---|
| Current Ratio | 2.17x | 3.18x |
| Quick Ratio (excl. inventory) | 2.17x | 3.18x |
| Cash as % of Current Liabilities | 71.6% | 209.8% |
Cash Flow Concerns:
- Deteriorating liquidity: Current ratio has fallen from 3.18x to 2.17x, though still adequate
- Debtor days appear extended: Trade debtors of £40,567 plus group undertakings of £42,622 suggest potential collection delays or deliberate intercompany positioning
- Creditor stretching: Trade creditors increased from £5,374 to £20,865 (288% increase) and tax/social security from £8,174 to £33,406 (309% increase). This may indicate cash flow pressure or normal growth-related timing
- Operating cash conversion: Profit of £9,619 but cash declined by £5,704, indicating poor cash conversion. The increase in working capital (debtors up ~£60k, creditors up ~£35k) has consumed cash
Debt Service Capability:
With no existing debt facilities and retained profits of £9,619, the company has capacity to service modest new debt. However, the intercompany balance of £42,622 effectively represents cash deployed outside the entity, reducing true liquidity available for debt service.
4. Monitoring Points
| Metric | Target/Threshold | Rationale |
|---|---|---|
| Group undertaking balance | Monitor quarterly | £42,622 owed by related parties — ensure repayment schedule exists and is adhered to |
| Current ratio | Minimum 1.5x | Currently 2.17x but declining; breach would signal working capital stress |
| Trade debtor days | Below 45 days | Significant debtor growth requires monitoring for collectibility |
| Tax liability clearance | Track CT payments | £33,406 taxation liability is substantial; confirm HMRC payments are current |
| Group guarantee | Obtain before drawdown | StirlingX Limited guarantee required for any facility to mitigate related party risk |
| PSC register accuracy | Immediate clarification | Conflicting >75% ownership claims between StirlingX and Gallos Technologies must be resolved |
| Employee costs | Monitor as % of turnover | Headcount doubled from 2 to 4; ensure revenue growth supports increased payroll |
| Filing compliance | Annual check | Accounts and confirmation statements currently up to date; maintain this position |
Additional Risk Factors: - The year-end changed from December to September (2024 was a 9-month period), making year-on-year comparisons difficult - The drone services market is competitive with regulatory requirements (CAA permissions) that must be maintained - The company holds no apparent overdraft or revolving credit facilities, suggesting limited headroom for unexpected cash needs