HUTTON & SYNDERCOMBE LIMITED
Executive Summary
Hutton & Syndercombe Limited shows a concerning liquidity mismatch with negligible current assets against substantial short-term liabilities. While the company maintains regulatory compliance and stable net asset levels driven by fixed investments, the illiquidity of assets and unclear control structure present risks to solvency and operational sustainability. Further investigation into asset realizability, creditor terms, and governance is warranted to fully assess financial stability.
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This analysis is opinion only and should not be interpreted as financial advice.
HUTTON & SYNDERCOMBE LIMITED - Analysis Report
Risk Rating: HIGH
The company exhibits significant liquidity concerns with current liabilities far exceeding current assets, resulting in a negative working capital position. Despite substantial fixed assets (investments), the lack of liquid assets to cover short-term obligations raises solvency and cash flow risks.Key Concerns:
- Negative Net Current Assets: Current assets of £1 versus current liabilities of over £113,000 indicate an inability to meet short-term debts from liquid resources.
- Concentration in Illiquid Investments: Fixed assets are entirely investments valued at £360,003 with no indication of marketability or income generation, limiting operational cash flow.
- Unusual PSC Ownership Reporting: There is conflicting information on share ownership/control among PSCs, with one individual reported holding 75-100% ownership yet two others hold 25-50%, indicating potential inaccuracies or complexities in control structure.
- Positive Indicators:
- Compliance with Filing Requirements: The company is active and up to date with both accounts and confirmation statement filings, showing regulatory compliance.
- Stable Net Asset Position: Net assets are consistent year-on-year (~£247k), indicating no material erosion of equity value despite liquidity issues.
- Small Company Reporting Exemption: The company qualifies for small company reporting, simplifying disclosures and audit requirements.
- Due Diligence Notes:
- Investigate the nature and marketability of the fixed asset investments to assess realizable value and potential to generate cash flow.
- Clarify the actual shareholding percentages and voting rights among PSCs to understand control and governance dynamics.
- Review creditor details to understand the nature and terms of the £113k current liabilities, including any overdue or disputed balances.
- Assess operational business activities and revenue streams given the SIC code for holding company activities and minimal current assets.
- Confirm rationale for lack of cash or equivalents and any plans to address liquidity shortfall.
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