INTELLIGENT WASTE MANAGEMENT LIMITED
Company number 07659499 · 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: Intelligent Waste Management Limited
1. Credit Opinion: APPROVE
Rationale: This business presents a compelling credit profile. Net assets have grown consistently from £19,884 (2016) to £601,834 (2025)—a thirty-fold increase demonstrating sustained profitability and prudent management. The liquidity position is exceptional, with cash of £541,252 covering current liabilities 1.39 times over. Leverage is conservative, with borrowings limited to hire purchase contracts for the vehicle fleet (appropriate for a waste management operation). The company has operated for 14 years through economic cycles, demonstrating meaningful business resilience.
2. Financial Strength
Balance Sheet Summary (Year Ending 31 May 2025):
| Metric | 2025 | 2024 | Movement |
|---|---|---|---|
| Total Assets | £925,810 | £946,554 | -2.2% |
| Total Liabilities | £388,428 | £407,601 | -4.7% |
| Net Assets | £601,834 | £569,831 | +5.6% |
| Shareholders' Funds | £601,834 | £569,831 | +5.6% |
| Retained Earnings | £601,734 | £569,731 | +5.6% |
Key Observations:
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Equity Growth: Net assets increased by £32,003 (5.6%) year-on-year, reflecting retained profits. Over the decade, compound annual growth in net assets is approximately 46%—an exceptional trajectory.
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Modest Capital Base: Share capital remains at just £100, meaning virtually all equity has been generated through retained earnings. This indicates management has reinvested profits rather than distributing them—positive for creditors.
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Asset Composition: Cash represents 58% of total assets (£541,252 of £925,810), providing substantial buffer. Fixed assets of £233,577 are predominantly motor vehicles (£205,152 net book value), appropriate for the waste management sector.
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Debt Structure: No bank loans or overdrafts of significance (£1). The only borrowings are hire purchase contracts totaling £194,604 (current: £83,873; non-current: £110,731), secured against vehicles—standard asset finance.
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Gearing: Total liabilities to net assets ratio is 0.65x—conservative. Excluding trade creditors and tax, financial debt is modest relative to the equity base.
3. Cash Flow Assessment
Liquidity Position:
| Metric | 2025 | 2024 |
|---|---|---|
| Current Assets | £925,810 | £946,554 |
| Current Liabilities | £388,428 | £407,601 |
| Net Current Assets | £537,382 | £538,953 |
| Current Ratio | 2.38x | 2.32x |
| Quick Ratio (ex-stock) | 2.38x | 2.32x |
| Cash | £541,252 | £568,332 |
Working Capital Analysis:
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Current Ratio: 2.38x is robust. The business can comfortably meet short-term obligations.
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Cash Position: Cash decreased by £27,080 (4.8%) year-on-year, but this coincided with £107,810 in capital expenditure on vehicles and leasehold improvements. The business is investing for growth while maintaining strong liquidity.
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Trade Debtors: £355,865 (up from £350,463)—a 1.5% increase suggesting controlled credit management. Debtor days appear reasonable given the cash-rich balance sheet.
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Trade Creditors: £109,239 (down from £152,961)—a 28.7% decrease. The business is paying suppliers more promptly, which may indicate strong supplier relationships or negotiating position.
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Taxation & Social Security: £170,728—significant but expected for a profitable company with 34 employees.
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Debt Service Capacity: With cash of £541,252 against HP commitments of £83,873 due within one year, debt service coverage is comfortably above 6x. No concern whatsoever regarding repayment capacity.
4. Monitoring Points
| Metric | Current Position | Watch Threshold | Comment |
|---|---|---|---|
| Current Ratio | 2.38x | Below 1.5x | Strong; monitor for deterioration |
| Cash Balance | £541,252 | Below £300k | Healthy buffer; track quarterly |
| Trade Debtors | £355,865 | >40% of total assets | Currently 38.4%; approaching threshold |
| Net Assets Trend | £601,834 | Declining over 2+ periods | Growing consistently |
| HP Commitments | £194,604 | Increasing rapidly | Moderate; asset-backed |
| Employee Count | 34 | Significant decline | Growing; monitor for contraction |
| Filing Compliance | Current | Overdue filings | Next accounts due Feb 2028 |
Specific Monitoring Recommendations:
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Trade Debtor Quality: At £355,865, debtors represent a significant portion of current assets. Request aged debtor analysis if seeking larger facilities. Monitor for concentration risk and collection trends.
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Capital Expenditure Cycle: The business invested £107,810 in FY2025 (primarily vehicles). Understand the replacement cycle and future capex requirements—vehicle fleets in waste management require ongoing investment.
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Profitability Trends: Retained earnings increased by £32,003, but without the profit & loss account, we cannot determine operating margins. Request management accounts to assess trading performance and margin trends.
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Dividend Policy: With retained earnings of £601,734 and share capital of only £100, there is potential for significant dividend extraction. Monitor for aggressive distributions that could weaken the balance sheet.
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Sector Risks: Waste management is subject to regulatory changes (environmental permits, landfill tax, recycling targets). Monitor for regulatory headwinds affecting operating costs.
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Related Party Transactions: No disclosure visible in filleted accounts. Request confirmation of any director loans or related party balances.