M W POWER SYSTEMS LIMITED
Company number 03069822 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Credit Analysis: M W POWER SYSTEMS LIMITED (03069822)
1. Credit Opinion: DECLINE
This application should be declined. The company is chronically insolvent with negative net assets persisting for at least a decade, and the current liabilities have nearly doubled in the latest year. Critically, the company is subject to a proposal to strike off at Companies House, indicating an active process to dissolve the entity. Extending credit to this business carries near-certain loss risk.
2. Financial Strength: Critically Weak
The balance sheet reveals severe and persistent insolvency:
| Metric | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 |
|---|---|---|---|---|---|---|
| Total Assets | £149,132 | £111,543 | £34,148 | £51,854 | £12,816 | £57,083 |
| Total Liabilities | £427,138 | £230,469 | £183,606 | £230,884 | £191,556 | £194,758 |
| Net Assets | (£278,006) | (£281,527) | (£280,778) | (£280,983) | (£281,690) | (£239,217) |
Key concerns:
- Negative net assets for 10+ consecutive years — The accumulated deficit has remained around £280k since 2015, demonstrating structural insolvency rather than a temporary downturn.
- Liabilities have nearly doubled — Current liabilities jumped from £230,469 (2023) to £427,138 (2024), a deterioration of £196,669. This is alarming.
- No fixed assets — The company holds zero fixed assets, meaning there is no asset base to support borrowing or provide security.
- Share capital of £100,100 is entirely eroded by accumulated losses of approximately £378,106.
- Current ratio of 0.35:1 — Current assets (£149,132) cover only 35% of current liabilities (£427,138). A healthy ratio would exceed 1.5:1.
The slight improvement in net assets from (£281,527) to (£278,006) is marginal and does not alter the fundamental insolvency position.
3. Cash Flow Assessment: No Repayment Capacity
As a micro-entity, the company files minimal accounts with no profit and loss disclosure, no cash flow statement, and no turnover figures. However, the balance sheet movements reveal significant concerns:
- Working capital deficit of £278,006 — The company cannot meet its current debts from current assets. Any creditor demanding payment would push the company into formal insolvency.
- Long-term creditors of £162,601 (2023) moved to current — The 2023 balance sheet showed £162,601 in creditors due after one year; the 2024 accounts show zero. This suggests long-term debts have been reclassified as current, accelerating repayment pressure.
- No cash reserves reported — The 2015 filing (last year with cash data) showed only £4,415. Given the persistent insolvency, there is no reason to believe cash position has improved materially.
- No evidence of trading revenue — The absence of fixed assets and the minimal asset base suggest the company may be largely dormant or trading at negligible levels.
The company lacks the liquidity to service existing obligations, let alone new debt.
4. Monitoring Points: Critical Red Flags
| Risk Factor | Detail | Severity |
|---|---|---|
| Strike-off proposal | Active proposal to dissolve the company at Companies House | 🔴 Critical |
| Chronic insolvency | Negative net assets for 10+ years | 🔴 Critical |
| Liability surge | Current liabilities nearly doubled year-on-year | 🔴 Critical |
| Zero fixed assets | No asset base for security | 🔴 High |
| Micro-entity filing | Minimal disclosure obscures true position | 🟡 Medium |
| Group structure | PSC includes M W Power Systems Group Limited — related party exposure unclear | 🟡 Medium |
| Director concentration | Single director (Edward Daoud Andrews) holds dual role as secretary | 🟡 Medium |
Specific items to monitor if any credit relationship existed:
- Strike-off status — If the strike-off proceeds, the company will be dissolved and all creditor claims extinguished (unless restored to the register). Any credit extended would likely be lost.
- Related party transactions — The group PSC structure raises questions about whether inter-company balances are driving the liability increase. The £196,669 jump in current liabilities may represent amounts due to the parent company being called in.
- Director conduct — The sole director has presided over a decade of insolvency. While no disqualification orders appear, the ongoing trading whilst insolvent raises questions about compliance with director duties under the Insolvency Act 1986.
- Filing compliance — Accounts are current (made up to November 2024), which is the only positive indicator in this assessment.
Supplementary Notes
Business Context: The company's SIC codes (manufacture of electric motors/generators/transformers and repair of other equipment) and website description (UAVs, microdrones, generator servicing) suggest a niche engineering business. However, there is no evidence of meaningful trading activity in the financial data.
Group Considerations: M W Power Systems Group Limited holds 75%+ ownership. Any assessment of this entity would require understanding the parent's financial position and whether the liabilities represent genuine third-party obligations or inter-company balances that may be subordinated.