LAGAN COMMUNICATIONS LTD

Executive Summary

Lagan Communications Ltd shows early signs of financial recovery with reported profitability and no compliance issues. However, its extremely limited working capital and minimal equity base present moderate liquidity and solvency risks. Further cash flow analysis and review of dividend practices are advised to assess operational sustainability.

LAGAN COMMUNICATIONS LTD - Analysis Report

Company Number: NI677653

Analysis Date: 2025-07-29 18:12 UTC

1. Risk Rating: MEDIUM
   The company has recently moved from negative to marginally positive net current assets and shareholders' funds, indicating some improvement in solvency. However, the very low net current assets (£39) and minimal equity (£39) relative to current liabilities (£65,530) pose a risk to short-term financial stability. The company is active and compliant with filings, which is favorable, but the thin capital base and dependence on director funding or credit highlight moderate risk.

2. Key Concerns:

• Low working capital: Net current assets of only £39 suggest tight liquidity and potential difficulty meeting short-term obligations without additional funding.
• Minimal equity base: Shareholders' funds are nearly zero, indicating limited buffer to absorb losses or financial shocks.
• Dividend payments in excess of retained profit: The company paid dividends of £30,750 despite generating a profit of £31,399, which may strain cash resources and warrants review of dividend policy and cash flow sustainability.

3. Positive Indicators:

• Profit generation: The company reported a profit of £31,399 for the year ended March 2024, a significant turnaround from previous losses.
• Compliance: No overdue filings reported for accounts or confirmation statements, indicating good regulatory adherence and governance.
• Stable director presence: The current director, Ms. S Lagan, has been in position since incorporation, providing continuity in management.

4. Due Diligence Notes:

• Examine the company's cash flow statements and projections to confirm the sustainability of liquidity given the narrow working capital.
• Review the rationale and timing of dividend payments relative to cash availability and operational needs.
• Investigate any contingent liabilities or off-balance sheet obligations not reflected in current financials.
• Confirm the nature of creditors and payment terms to assess refinancing or settlement risks.
• Clarify the business model and client base under SIC 70210 to understand revenue stability and growth prospects.