OCEANIA ENGINEERING LIMITED

Executive Summary

OCEANIA ENGINEERING LIMITED exhibits considerable financial stress marked by negative net assets and working capital deterioration in its latest accounts, raising solvency and liquidity concerns. Although compliant with filing requirements and operating in a specialized engineering sector, the company’s dividend policy and absence of receivables warrant further scrutiny to evaluate sustainability. Immediate due diligence should focus on cash flow dynamics and management’s recovery strategy.

OCEANIA ENGINEERING LIMITED - Analysis Report

Company Number: 13575582

Analysis Date: 2025-07-29 12:26 UTC

1. Risk Rating: HIGH
   Justification: The company shows a significant deterioration in net assets, shifting from a positive net asset position (£1,272) in 2023 to a negative net asset position (£-5,430) in 2024. Current liabilities exceed current assets, resulting in negative net working capital, which indicates potential liquidity stress. The lack of debtors and low cash balances increase concerns about the company’s ability to meet short-term obligations.

2. Key Concerns:

• Negative net assets and negative shareholders’ funds at the most recent year end, indicating an erosion of equity and potential solvency issues.
• Negative net current assets, with current liabilities (£13,350) exceeding current assets (£7,920), and zero trade debtors, suggesting limited recoverable receivables and strained liquidity.
• Dividend payments (£32,814) exceed profit for the period (£26,112), which has contributed to the depletion of reserves and weakened financial position.

3. Positive Indicators:

• The company remains active and is up to date with all statutory filings and accounts, showing compliance with regulatory requirements.
• The business operates in a specialized engineering design sector (SIC 71121), which may offer niche market opportunities.
• The director affirms going concern status and ongoing review of financial position, indicating management awareness and oversight.

4. Due Diligence Notes:

• Investigate the nature and timing of the dividend payments relative to company earnings and cash flows, as these have materially impacted reserves.
• Review cash flow statements (not provided) to assess operational cash generation capability and any short-term funding arrangements.
• Clarify the absence of trade debtors in 2024 and whether this reflects a change in business model, client base, or collection issues.
• Examine any contingent liabilities or off-balance-sheet obligations that might affect solvency.
• Confirm the director’s plans or arrangements to restore positive working capital and net asset position.