MGA MAINTENANCE LTD

Executive Summary

MGA Maintenance Ltd shows early signs of financial improvement with positive net assets and increased cash balances, though short-term liquidity remains tight due to current liabilities exceeding current assets. The company's small scale and reliance on director loans warrant careful monitoring of cash flow sustainability and operational performance. Compliance is satisfactory, with no overdue filings or regulatory issues noted.

MGA MAINTENANCE LTD - Analysis Report

Company Number: 14384908

Analysis Date: 2025-07-29 17:39 UTC

1. Risk Rating: MEDIUM

Justification: MGA Maintenance Ltd is a recently incorporated private limited company operating in motor vehicle maintenance. The latest accounts show a marginally positive net asset position and improved cash balances compared to prior years, indicating some progress toward financial stability. However, the company continues to have negative net current assets and current liabilities slightly exceeding current assets, which presents liquidity risk. The small scale and limited employee base also suggest operational constraints.

2. Key Concerns:

• Liquidity Pressure: Current liabilities (£13,072) exceed current assets (cash £12,518 plus negligible receivables) resulting in negative net current assets (-£554), indicating potential cash flow challenges to meet short-term obligations.
• History of Losses and Negative Equity: The company reported net liabilities of £2,543 in the previous year, though improved to a small net asset of £129 currently. This turnaround is positive but still leaves a very thin equity buffer.
• Director Loans: The presence of director loans (£3,042) as part of current liabilities may indicate reliance on related party funding, which could be a risk if external financing is not secured.

3. Positive Indicators:

• Improved Financial Position: The company has moved from negative equity and net current assets in 2023 to a slightly positive net asset position in 2024, showing signs of operational improvement.
• Cash Increase: Cash at bank increased from £3,091 to £12,518 over the year, which supports liquidity despite current liabilities.
• Compliance: No overdue accounts or confirmation statements; filings are up to date with no regulatory concerns noted.
• Clear Ownership and Control: One individual holds full control and voting rights, which can streamline decision-making.

4. Due Diligence Notes:

• Investigate the sustainability of cash inflows and operational cash flow generation to confirm the company can service current liabilities without additional director loans.
• Review contracts, customer base, and order book to assess ongoing revenue streams and operational viability given the single employee and small asset base.
• Clarify the terms and conditions of director loans and any repayment plans or potential capital injections.
• Monitor for any contingent liabilities or off-balance sheet obligations not disclosed in the accounts.
• Verify absence of any director conduct issues or compliance flags beyond the provided data.