LECTRON ELECTRICAL LTD

Executive Summary

Lectron Electrical Ltd is an early-stage company with a weak financial position characterized by negative net assets and significant working capital deficits. Its current liquidity is insufficient to cover liabilities, relying heavily on director support. Given these factors, credit facilities are not recommended at this time without substantial improvement or additional guarantees.

LECTRON ELECTRICAL LTD - Analysis Report

Company Number: 14226754

Analysis Date: 2025-07-20 12:05 UTC

1. Credit Opinion: DECLINE
   Lectron Electrical Ltd presents a high credit risk given its very weak financial position as at 31 October 2023. The company shows net liabilities of £3,340 and net current liabilities of £9,677, indicating insufficient short-term assets to cover current liabilities. As a recently incorporated entity (July 2022) with limited trading history and negative equity, it lacks a proven track record of profitability or cash generation. The director’s reliance on personal funds to support working capital suggests external credit support is currently unavailable or inadequate. Without clear evidence of improving financials or external guarantees, the company’s ability to service debt obligations is highly questionable.

2. Financial Strength:
   The balance sheet reveals tangible fixed assets of £7,824 but limited current assets (£1,635) predominantly debtors (£1,624) and minimal cash (£11). Current liabilities (£11,312) far exceed current assets, resulting in a substantial working capital deficit. Provisions for liabilities (£1,487) contribute further to net liabilities. Shareholders’ funds are negative (£-3,440), reflecting accumulated losses since inception. The company’s small scale (one employee) and classification under the Electrical Installation SIC code suggest limited operational breadth. The financial position indicates weak capital structure and low financial resilience.

3. Cash Flow Assessment:
   The company holds negligible cash balances (£11) and relies heavily on debtor collections (£1,624) for liquidity. The large current liabilities balance (£11,312) suggests significant short-term obligations that cannot be met from liquid assets. The working capital deficit (-£9,677) points to potential liquidity stress and the need for ongoing director funding or external financing to meet immediate obligations. Without positive cash flow from operations or external funding, the risk of payment default is elevated.

4. Monitoring Points:

• Quarterly updates on cash flow and debtor collections to track liquidity trends.
• Changes in working capital position and current liabilities levels.
• Evidence of new contracts or revenue growth improving cash generation.
• Any director loans or external funding arrangements supporting operations.
• Timely filing of statutory accounts and confirmation statements to ensure compliance.