LITCO GROUP LTD

Executive Summary

LITCO GROUP LTD demonstrates a clear turnaround in liquidity and equity position in its second full financial year, with no compliance issues evident. However, the company’s small scale, limited operational history, and prior liquidity challenges suggest moderate risk that merits further financial and operational review. Continued monitoring of cash flows and asset investment plans is recommended to assess ongoing sustainability.

LITCO GROUP LTD - Analysis Report

Company Number: 13933996

Analysis Date: 2025-07-20 15:59 UTC

1. Risk Rating: MEDIUM
   LITCO GROUP LTD shows improving financial health with positive net current assets and net assets growth in the latest year. However, the early stage of the company (incorporated 2022) and prior period working capital deficits warrant caution. The financials indicate recovery but limited operational history restricts full assessment of stability.

2. Key Concerns:

• Initial negative working capital position in 2023 indicates prior liquidity stress, which could have impaired operations or supplier relationships.
• Tangible fixed assets decreased from 2023 to 2024, primarily due to depreciation charges exceeding additions, potentially limiting operational capacity or requiring future capital expenditure.
• Small scale of operations with only 2 employees and relatively low asset base may limit resilience to market or operational shocks.

3. Positive Indicators:

• Significant improvement in net current assets from negative £6,152 in 2023 to positive £17,427 in 2024, driven by increased cash and debtors, suggesting better liquidity management.
• Net assets increased from £12,064 to £31,881 year-on-year, reflecting retained earnings growth and stronger equity position.
• No overdue filings or compliance issues; accounts and confirmation statements are up to date, indicating good regulatory compliance.
• Single director with 75-100% control shows clear leadership and decision-making authority.

4. Due Diligence Notes:

• Review detailed cash flow statements and management accounts to verify sustainability of improved liquidity and identify any seasonality or one-off factors.
• Investigate reasons for reduction in fixed assets and plans for future capital investment to maintain operational capacity.
• Assess customer concentration risk given small debtor base and construction industry exposure.
• Confirm absence of contingent liabilities or off-balance sheet risks not disclosed in notes.
• Clarify the nature of prepayments/accrued income which represent a significant portion of debtors.