LCL ENGINEERING SUPPORT LTD

Executive Summary

LCL ENGINEERING SUPPORT LTD shows strong financial improvement with growing net assets and healthy working capital for a micro-entity. The company maintains good compliance and stable management, supporting its ability to service debt. Continued monitoring of short-term liabilities and operational profitability is advised to sustain creditworthiness.

LCL ENGINEERING SUPPORT LTD - Analysis Report

Company Number: 13444648

Analysis Date: 2025-07-20 16:06 UTC

1. Credit Opinion: APPROVE
   LCL ENGINEERING SUPPORT LTD demonstrates a solid financial position for a micro-entity with positive net assets growth and healthy working capital. The company is relatively new (incorporated in 2021) but shows a clear upward trajectory in net assets and net current assets, indicating improving operational performance. No overdue filings or director disqualifications are noted, reducing compliance risk. The two current directors appear to have stable control and no adverse records. Given the limited scale and modest fixed assets, credit facilities should be sized appropriately, but the company’s financial health supports credit approval.

2. Financial Strength:
   The balance sheet as of 30 June 2024 shows net assets of £93,227, nearly doubling from £50,470 in 2023. This growth is driven primarily by increased current assets, which rose from £56,005 to £206,837, while current liabilities increased less sharply from £32,963 to £136,716, resulting in net current assets of £70,121 (2023: £23,042). Fixed assets decreased slightly, indicating no major capital expenditure but maintaining a stable asset base. Shareholders’ funds fully cover net assets, with no indication of accumulated losses. Overall, the company maintains a strong equity base and improved liquidity.

3. Cash Flow Assessment:
   The substantial increase in current assets relative to current liabilities suggests improved short-term liquidity and working capital management. The net current assets of £70,121 imply the company can cover its short-term obligations comfortably. The average number of employees is stable at 3, indicating controlled overhead costs. While detailed cash flow statements are not provided, the movement in working capital and net assets points toward positive cash generation or effective receipt of trade receivables. Monitoring is recommended for the increase in current liabilities, which grew fourfold, to ensure it is not indicative of stretched payables or rising short-term debt.

4. Monitoring Points:

• Track the proportion and aging of current liabilities to ensure payables do not accumulate beyond manageable levels.
• Monitor revenue growth and profitability once profit and loss data become available to confirm sustainability of asset growth.
• Watch for any changes in director composition or control that might affect management stability.
• Review subsequent filing and compliance status to mitigate regulatory risk.