NENE CYBER SECURITY LTD

Executive Summary

Nene Cyber Security Ltd has demonstrated ongoing solvency challenges with negative net assets, though some improvement is evident in the latest financial year. Liquidity remains constrained due to limited cash and high short-term liabilities, compounded by reliance on director loans. Despite regulatory compliance, detailed due diligence on cash flow and operational sustainability is essential to fully assess investment risk.

NENE CYBER SECURITY LTD - Analysis Report

Company Number: 12620408

Analysis Date: 2025-07-20 18:15 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency risks given persistent negative net assets and shareholders’ funds, despite recent improvements. Large liabilities relative to assets and ongoing director loans indicate financial vulnerability.

2. Key Concerns:

   • Negative Net Assets & Shareholders’ Funds: The company has reported negative equity for multiple years, though reduced from -£14,338 in 2023 to -£2,564 in 2024, indicating accumulated losses and potential insolvency risk.
   • Reliance on Director Loan: A substantial loan from the sole director (£4,577) is recorded as a debtor, which is interest-free and repayable on demand, signalling potential liquidity dependency and related party risk.
   • High Current Liabilities vs. Cash: At year-end 2024, current liabilities (£4,766) significantly exceed cash balances (£573), with current assets only marginally above current liabilities, reflecting tight liquidity and potential short-term cash flow stress.

3. Positive Indicators:

   • Improvement in Financial Position: The company’s net liabilities have decreased substantially in the latest year, from -£14,337 to -£2,564, suggesting some operational or financial recovery.
   • No Overdue Filings: Accounts and confirmation statements are up to date, indicating compliance with statutory reporting obligations.
   • Sole Director with Full Control: Mr. Andrew Gareth Fruish’s full ownership and control may facilitate swift decision-making and potential capital support.

4. Due Diligence Notes:

   • Verify Sustainability of Director Loans: Confirm the terms, potential for continued support, and impact on liquidity if the director loan were to be recalled.
   • Assess Cash Flow Forecasts: Obtain management accounts and cash flow projections to understand short-term liquidity and working capital management.
   • Review Revenue and Profitability Trends: Since turnover and profit/loss information is absent, investigate the company’s ability to generate sustainable revenues and positive margins.
   • Examine Creditors’ Terms: Clarify the nature and maturity profile of creditors, particularly bank loans and overdrafts, to assess refinancing risks.
   • Evaluate Operational Model and Market Position: Given the company operates in IT consultancy, confirm client base stability, contract pipeline, and competition impact.

Executive Summary:
Nene Cyber Security Ltd shows a high risk profile due to persistent negative equity and reliance on director loans, though its financial position has improved recently. Liquidity appears tight with current liabilities close to current assets and cash reserves low. While compliance with filing deadlines is maintained, further investigation into cash flow sustainability and operational viability is critical before considering investment.