Company Number: 13790979

Analysis Date: 2025-07-20 17:26 UTC

1. Risk Rating: LOW
   NYKKU Air Conditioning Limited demonstrates a positive net current asset position with increasing shareholders’ funds over the last two years. The company is current on all filings with no indications of insolvency or regulatory non-compliance. Its cash balance relative to current liabilities is robust, reducing short-term liquidity risks.

2. Key Concerns:

• Concentration of control: The sole director and 100% shareholder is the same individual, which could pose governance risks and limit independent oversight.
• Limited financial disclosures: The absence of an income statement and audit limits insight into profitability and operational performance, which restricts thorough risk evaluation.
• Modest asset base: With relatively low tangible fixed assets and a small number of employees (average 2), operational scalability and resilience to market shocks may be constrained.

3. Positive Indicators:

• Strong liquidity position: Cash of £619k comfortably exceeds short-term borrowings and a significant portion of current liabilities.
• Growing net assets: Shareholders’ funds nearly doubled from £106k in 2022 to £207k in 2023, indicating retained earnings accumulation and improved financial health.
• Compliance and timely filings: All statutory accounts and confirmation statements are filed on time with no overdue returns or penalties noted.
• Clear business focus: SIC codes align with the company’s core activities in air-conditioning installation and related consultancy, indicating operational clarity.

4. Due Diligence Notes:

• Obtain the full income statement and cash flow details to assess profitability, margin trends, and cash generation capacity.
• Review debtor aging and credit control procedures given material trade debtors (£418k) to evaluate collection risk.
• Investigate the nature of "other creditors" (£482k) which represent a significant portion of current liabilities to understand potential obligations or contingent liabilities.
• Consider governance arrangements given sole director/shareholder status, including any related party transactions or conflict of interest policies.
• Verify operational capacity and contracts to assess business sustainability and growth outlook beyond the limited employee base.