HPS RENDERING LIMITED

Executive Summary

HPS Rendering Limited is a very new micro-entity with a fragile financial position characterized by low net assets and negative working capital. While it currently meets compliance requirements, the limited trading history and poor liquidity require cautious credit exposure, preferably with conditions such as financial reporting and guarantees. Ongoing monitoring of cash flow and capital support will be critical to managing credit risk.

HPS RENDERING LIMITED - Analysis Report

Company Number: 15857941

Analysis Date: 2025-07-29 16:05 UTC

1. Credit Opinion: CONDITIONAL APPROVAL HPS Rendering Limited is a newly incorporated micro-entity operating in the floor and wall covering industry. The company shows very limited financial history with minimal net assets (£131) and significant net current liabilities (-£5,714) as of 31 March 2025. The negative working capital position indicates potential liquidity strains. However, there is no overdue filing or compliance issue, and the directors appear engaged. Credit approval should be conditional on obtaining further financial information, including cash flow forecasts, and possibly personal guarantees given the early stage and weak liquidity metrics.

2. Financial Strength: The balance sheet reflects a very small asset base (£6,645 fixed assets and £182 current assets) with current liabilities of £5,896, resulting in net current liabilities of -£5,714. The net asset position is marginally positive at £131, supported mainly by fixed assets. Accruals and deferred income of £800 further reduce the net assets. The company’s capital and reserves are minimal, reflecting initial equity investment only. The financial structure reveals a fragile equity buffer and a working capital deficit, which raises concerns about the ability to meet short-term obligations without additional funding.

3. Cash Flow Assessment: Current assets of £182 are insufficient to cover current liabilities of £5,896, indicating poor liquidity and potential cash flow challenges. The negative net current assets imply reliance on external funding or director advances to support operations. The accounts note a dividend payment of £7,500 to director Mr. Rossiter, which may further strain cash resources unless adequately funded. With only three employees and a very short trading history (8 months), the company’s cash flow stability is unproven. Careful monitoring of cash inflows and outflows is essential to ensure sustainability.

4. Monitoring Points:

• Monitor monthly cash flow statements and working capital changes to assess liquidity improvements or deterioration.
• Review subsequent trading performance and turnover growth to evaluate the company’s ability to generate sustainable cash earnings.
• Track any additional capital injections or director loans that may shore up the balance sheet.
• Watch for timely filing of future accounts and confirmation statements to maintain regulatory compliance.
• Monitor dividend payments relative to profitability and cash availability to avoid further liquidity pressure.