LUTROM GROUP LIMITED

Executive Summary

Lutrom Group Limited shows significant financial deterioration in its latest accounts, with sharply reduced net current assets and cash reserves, posing liquidity and solvency risks. The company maintains good regulatory compliance and is under strong owner control, but the underlying operational sustainability and receivables collection warrant further scrutiny. Immediate due diligence is advised to clarify the causes of financial decline and assess future viability.

LUTROM GROUP LIMITED - Analysis Report

Company Number: 13537488

Analysis Date: 2025-07-20 16:39 UTC

1. Risk Rating: HIGH
   The company exhibits a sharp deterioration in net current assets and shareholders' funds between 2023 and 2024, indicating heightened solvency and liquidity risks. The minimal cash balance and reliance on debtors raise concerns about near-term cash flow sufficiency.

2. Key Concerns:

• Significant Decline in Financial Position: Shareholders' funds dropped from £6,576 in 2023 to £434 in 2024, with net current assets declining from £6,573 to £431, signalling potential financial distress or operational challenges.
• Low Cash Holdings: Cash at bank fell from £555 to £106, raising alarms about liquidity to meet immediate obligations.
• High Debtor Concentration and Risk: Debtors represent the majority of current assets (£1,850 out of £1,956) suggesting a dependency on receivables collection which may delay cash inflows.

3. Positive Indicators:

• No Overdue Filings: Both annual accounts and confirmation statements are filed on time, indicating regulatory compliance and good governance practices.
• Strong Ownership and Control: The sole director and 75-100% shareholder is actively involved, which may facilitate swift decision-making and operational oversight.
• Going Concern Assertion: The director affirms the company is a going concern, suggesting management believes in operational continuity despite financial contraction.

4. Due Diligence Notes:

• Investigate the reasons behind the steep decline in debtors and net current assets between 2023 and 2024. Are there write-offs, bad debts, or changes in accounting policies?
• Review cash flow statements and bank reconciliations to assess liquidity management and ability to meet short-term liabilities.
• Clarify the nature of investments (£3) and any intercompany balances, given the company is classified as a holding company.
• Assess the business model viability given minimal staff (one employee including director) and the company’s classification under "activities of other holding companies."
• Confirm if any contingent liabilities or off-balance sheet risks exist that may impact solvency.