KONNECT TECHNICAL LIMITED

Executive Summary

Konnect Technical Limited shows clear signs of financial distress with negative net assets and declining current assets, raising significant solvency and liquidity risks. While regulatory compliance is maintained and ownership is stable, the company’s operational sustainability is questionable without further evidence of improving cash flows or asset recovery. Focused due diligence on cash flow, director advances, and business outlook is recommended before investment consideration.

KONNECT TECHNICAL LIMITED - Analysis Report

Company Number: 13114617

Analysis Date: 2025-07-20 11:23 UTC

1. Risk Rating: HIGH
   Konnect Technical Limited exhibits significant solvency and liquidity concerns evidenced by persistent negative net current assets, negative shareholders’ funds, and increasing net liabilities over recent years despite a micro company classification.

2. Key Concerns:

• Negative Working Capital & Shareholders’ Funds: The 2024 accounts show net current liabilities of £7,078 and shareholders’ funds of -£9,871, indicating the company’s liabilities exceed its assets, raising doubts about its ability to meet short-term obligations.
• Declining Asset Base: Fixed assets decreased from £5,857 in 2023 to £4,453 in 2024, and current assets plummeted significantly from £174,201 to £2,135, suggesting potential operational or financial distress and possible asset disposals or write-downs.
• Director Advances and Related Party Transactions: The company’s director made advances totaling £15,535 during the 2024 year with a small repayment, resulting in an outstanding balance of £2,130. This reliance on director funding may indicate cash flow difficulties and operational dependency.

3. Positive Indicators:

• Compliance with Filing Requirements: The company’s accounts and confirmation statements are filed on time with no overdue filings, reflecting good regulatory compliance and governance practices.
• Stable Ownership and Control: Mr Matthew Paul Lonsdale holds 75-100% of shares and voting rights and remains actively involved as the director, which can provide continuity in management and decision-making.
• Micro-entity Filing Status: The company qualifies as a micro entity, which limits its reporting requirements and may reduce administrative burdens and associated costs.

4. Due Diligence Notes:

• Investigate the nature and cause of the sharp decline in current assets from 2023 to 2024, specifically whether this relates to revenue loss, bad debts, or asset disposals.
• Review the company’s cash flow statements and bank statements (if available) to assess liquidity position and ability to meet immediate obligations.
• Examine the terms and conditions of director advances and any other related party transactions for potential conflicts of interest or financial risk.
• Assess future business plans and revenue generation capability in the electricity trade sector (SIC 35140), including contract pipeline and customer base stability.
• Confirm no outstanding or impending creditor actions given the negative net asset position and explore any contingent liabilities not reflected in the accounts.