MICROPRESTIGE LIMITED
Company number 06910632 · 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: MICROPRESTIGE LIMITED (06910632)
1. Credit Opinion: CONDITIONAL
Reasoning: MicroPrestige Limited demonstrates a positive long-term financial trajectory, having rebuilt from negative equity in 2015 to £64,853 net assets by 2024. However, several material concerns warrant a conditional rather than outright approval:
- Critically low cash reserves of just £1,289 create significant liquidity risk
- Sharp profit decline from £23,858 (FY2023) to £8,562 (FY2024) — a 64% reduction
- Heavy stock dependency — inventory represents 70% of current assets, creating vulnerability if stock becomes impaired
- Quick ratio of 0.40 — the business cannot cover short-term obligations without liquidating stock
- Overdue confirmation statement raises governance concerns
Any credit facility should be subject to a personal guarantee from Mr Bulduker and appropriate covenants monitoring cash flow and profitability.
2. Financial Strength
Balance Sheet Summary (FY2024):
| Metric | FY2024 | FY2023 | Movement |
|---|---|---|---|
| Total Assets | £326,616 | £327,085 | -0.1% |
| Total Liabilities | £236,300 | £235,783 | +0.2% |
| Net Assets | £64,853 | £56,791 | +14.2% |
| Shareholders' Funds | £64,853 | £56,791 | +14.2% |
Positive trajectory: Net assets have grown consistently from -£2,305 (2015) to £64,853 (2024), demonstrating genuine value creation over a sustained period.
Asset Composition Concern: - Fixed assets: £7,978 (2.4% of total assets) - Stocks: £225,000 (68.9% of total assets) - Trade debtors: £79,614 (24.4%) - Cash: £1,289 (0.4%)
The balance sheet is overwhelmingly weighted toward inventory. Any impairment to stock values would directly erode the equity position.
Debt-to-Equity: Total liabilities (£261,763 including long-term) to net assets (£64,853) yields a ratio of approximately 4.0:1 — elevated but typical for a wholesale/retail operation carrying significant trade creditors.
Capital Structure: Only £1 share capital. The entire equity base is accumulated retained profits, meaning there is no capital buffer beyond historical earnings.
3. Cash Flow Assessment
Liquidity Position:
| Metric | FY2024 | FY2023 |
|---|---|---|
| Current Assets | £318,638 | £316,948 |
| Current Liabilities | £236,300 | £235,783 |
| Net Current Assets | £82,338 | £81,165 |
| Current Ratio | 1.35 | 1.34 |
| Quick Ratio | 0.40 | 0.38 |
The current ratio appears adequate at 1.35, but this is misleading. Stripping out stock reveals a quick ratio of just 0.40 — the company cannot meet its short-term obligations without selling inventory.
Cash deterioration is the primary concern:
| Year | Cash | Year-on-Year Change |
|---|---|---|
| 2019 | £17,436 | — |
| 2020 | £1,825 | -89.5% |
| 2021 | £7,197 | +294.3% |
| 2022 | £6,381 | -11.3% |
| 2023 | £5,514 | -13.6% |
| 2024 | £1,289 | -76.6% |
Cash has declined 76.6% in the latest year. For a business with £236,300 in current liabilities, holding only £1,289 in cash represents a critical vulnerability.
Trade Debtors Growth: Increased from £53,662 to £79,614 (+48.4%). This may indicate slower collections or a deliberate shift to offering credit terms. Either scenario warrants scrutiny — if debtors are not being collected efficiently, cash flow will continue to deteriorate.
Creditor Analysis:
| Creditor Category | FY2024 | FY2023 |
|---|---|---|
| Trade Creditors | £49,234 | £33,438 |
| Other Creditors | £153,469 | £158,045 |
| Corporation Tax | £13,710 | £10,522 |
| Other Tax/SS | £14,331 | £32,074 |
| Loans (current) | £5,556 | £0 |
| Bank Loans (long-term) | £25,463 | £34,511 |
The "Other Creditors" figure of £153,469 is material and unexplained in the filed accounts. This could represent director loans, accrued expenses, or other obligations. Clarification should be sought.
Working Capital Cycle: The business appears to operate on extended creditor terms (trade creditors £49,234 vs trade debtors £79,614), suggesting it sells on credit but also purchases on credit. The gap between debtors and creditors has widened, which may indicate tightening supplier terms or growing receivables risk.
4. Monitoring Points
Immediate Concerns: 1. Cash position — Monitor monthly. Any further decline below £1,000 would signal potential insolvency risk 2. Profit trajectory — FY2024 profit of £8,562 is a significant decline from £23,858. Determine whether this reflects margin compression, increased costs, or one-off factors 3. Stock quality and turnover — £225,000 in inventory requires assessment of obsolescence risk and turnover rates 4. Other Creditors composition — Seek clarification on the £153,469 balance 5. Overdue confirmation statement — File immediately; non-compliance risks penalties and potential strike-off
Ongoing Covenants: - Minimum cash threshold of £5,000 - Profit before dividends to remain positive - No material increase in trade debtors days beyond current levels - Stock should not exceed 75% of current assets
Key Person Risk: Mr Bulduker holds >75% shares, voting rights, and director appointment rights. The business would likely cease to function in his absence. Consider requiring key person insurance as a condition of any facility.
Sector Consideration: The SIC code (46900 — Non-specialised wholesale trade) combined with the accounts noting "online retail" suggests a wholesale-to-retail operation. This sector faces margin pressure from competition and economic headwinds affecting consumer spending.