NETWORK DRY CLEANERS LIMITED

Executive Summary

Network Dry Cleaners Limited is currently in a financially distressed state with consistent negative net assets and severe liquidity shortfalls. The company’s inability to cover current liabilities with current assets and ongoing losses lead to a high credit risk profile. Approval of credit facilities is not recommended without substantial mitigation or evidence of an imminent financial turnaround.

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Company Analysis

This analysis is opinion only and should not be interpreted as financial advice.

NETWORK DRY CLEANERS LIMITED - Analysis Report

Company Number: 13121878

Analysis Date: 2025-07-20 12:25 UTC

  1. Credit Opinion: DECLINE
    Network Dry Cleaners Limited exhibits significant financial distress with persistent net liabilities and negative shareholders' funds worsening from -£80,532 in 2023 to -£96,865 in 2024. The company’s current liabilities of £407,121 exceed its current assets of £86,417 by a large margin, indicating severe liquidity issues and inability to meet short-term obligations. The negative net current assets position is consistent and substantial year over year, raising concerns about repayment capacity and financial stability. Without evidence of a turnaround plan or external capital injection, extending credit poses high risk.

  2. Financial Strength:
    The balance sheet shows a weak financial position. Fixed assets total £223,839 but are outweighed by current liabilities of £407,121, leading to negative net assets of £96,865 as of January 2024. Intangible assets (goodwill) form a large part of fixed assets (£180,937), which may have limited recoverability in distress scenarios. Share capital is nominal (£100), and accumulated losses reflected in the profit and loss reserve deepen the net liability position. The company does not have a cushion of equity to absorb losses or support debt.

  3. Cash Flow Assessment:
    Cash balances have increased to £43,042 but remain minimal relative to current liabilities. Debtors increased to £40,875, potentially improving liquidity if collectible, but the large overdraft or trade creditors remain a significant concern. Persistent negative working capital indicates ongoing cash flow pressure, with the company likely relying on external funding or creditor leniency to sustain operations. The absence of profit and continuing net losses reduce internal cash generation capability, heightening refinancing and liquidity risk.

  4. Monitoring Points:

  • Evolution of net current assets and net liabilities: watch for reduction in creditor balances and improvement in working capital
  • Cash flow statements (if available) to assess operational cash generation and debt servicing capacity
  • Debtor collection efficiency and aging profile to confirm liquidity strength
  • Profitability trends and cost control measures to evaluate recovery potential
  • Director and shareholder actions for capital injections or restructuring efforts

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