MAINTENANCE CONTRACTS LTD

Executive Summary

Maintenance Contracts Ltd exhibits significant financial distress with deepening net liabilities and a critical liquidity shortfall, raising high solvency risk. Although compliance and operational continuity appear intact, reliance on director loans and negative working capital are key concerns requiring further investigation into cash flow and business sustainability. Investors should exercise caution and conduct comprehensive financial due diligence before engagement.

MAINTENANCE CONTRACTS LTD - Analysis Report

Company Number: 14016826

Analysis Date: 2025-07-29 21:01 UTC

1. Risk Rating: HIGH
   The company shows significant and growing net liabilities with negative shareholders’ funds worsening from -£3,385 (2023) to -£24,618 (2024). Current liabilities substantially exceed current assets, indicating liquidity stress and potential solvency issues.

2. Key Concerns:

• Solvency Risk: The net liabilities position and negative shareholders’ funds indicate the company is insolvent on a balance sheet basis with no equity buffer.
• Liquidity Concerns: Minimal cash balance (£9 in 2024) versus high current liabilities (£31,627) suggests severe cash flow constraints and difficulty meeting short-term obligations.
• Director Loans: A significant increase in directors’ loan accounts (£849 to £20,518) raises questions about the company’s reliance on director funding, potentially masking operational cash flow deficiencies.

3. Positive Indicators:

• Compliance: The company is up to date with both accounts and confirmation statement filings, with no overdue filings or apparent regulatory compliance issues.
• Operational Continuity: Despite financial difficulties, the company remains active and maintains a website reflecting ongoing business operations.
• Stable Workforce: The average employee count remained constant at 2, suggesting operational stability at a small scale.

4. Due Diligence Notes:

• Investigate the nature and terms of the director’s loan account to understand risk and repayment prospects.
• Obtain detailed profit and loss accounts or management accounts to assess operational cash flows and the reasons behind deteriorating net assets.
• Review contracts and client base to evaluate the sustainability of revenue streams given the negative working capital position.
• Confirm absence of contingent liabilities or hidden debts not reflected in the balance sheet.
• Evaluate the impact of the recent change in directors on company strategy and financial management.