Company Number: 13658890

Analysis Date: 2025-07-20 18:57 UTC

1. Risk Rating: HIGH
   LNG Contractors Ltd shows significant solvency and liquidity concerns, with net current liabilities worsening substantially in the most recent year and shareholders' funds turning negative. The company's going concern statement relies heavily on director support, indicating financial distress.

2. Key Concerns:

• Negative Net Current Assets: The company had net current liabilities of £34,551 as of 31 October 2023, a marked deterioration from £7,837 the previous year, indicating potential liquidity issues.
• Negative Shareholders’ Funds: Shareholders’ funds declined from positive £5,463 in 2022 to negative £8,750 in 2023, reflecting accumulated losses and erosion of equity capital.
• Reliance on Director Loans: The directors’ current accounts increased significantly to £22,385 in 2023 from £1,388 in 2022, showing dependency on director financing to maintain operations, which may not be sustainable long term.

3. Positive Indicators:

• No Overdue Filings: The company is up to date with both accounts and confirmation statement filings, indicating compliance with Companies House requirements.
• Active Status with Operating Assets: Tangible fixed assets increased to £25,802, suggesting ongoing investment in operational capacity.
• Small Employee Base: With only 2 employees, the company maintains a lean operational structure which could allow flexibility in cost management.

4. Due Diligence Notes:

• Investigate the nature and terms of director loans and whether these are repayable or convertible, and assess the risk of withdrawal of support.
• Review the profit and loss trends to determine the causes of losses and whether operational improvements or restructuring plans exist.
• Confirm the company's cash flow position and any overdraft or credit facilities in place to manage short-term liabilities.
• Assess the company’s customer base and contract pipeline given the SIC codes related to painting and construction, to evaluate business sustainability.
• Verify whether the director’s statement on going concern has been independently reviewed or if there are any external audit or accountant concerns.