Company Number: 12426283

Analysis Date: 2025-07-20 18:34 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Off Grid Engineering Ltd demonstrates a viable trading position with positive net assets and working capital as of the latest accounts dated 31 January 2024. However, there is a significant decline in current assets and net current assets compared to the previous year, alongside increased long-term obligations. This suggests some liquidity tightening and increased financing risk. Approval for credit facilities is recommended subject to monitoring the company’s cash flow and receivables collection to ensure timely servicing of liabilities.

2. Financial Strength:

• Net Assets increased to £25,627 in 2024 from £1,539 in 2023, reflecting improved retained earnings (£25,624 P&L reserves).
• Fixed assets decreased to £17,194 from £28,988 indicating asset disposals or depreciation outpacing additions.
• Current assets declined significantly from £435,982 to £278,474, mainly due to reduced debtors (£215,726 vs £345,118) and stock (£12,372 vs £44,189).
• Current liabilities decreased from £431,821 to £217,490, improving short-term solvency.
• Long-term creditors (finance leases and deferred income) fell from £431,821 to £217,490, reducing long-term gearing.
  Overall, the balance sheet shows moderate financial strength with improved equity but a notable reduction in asset base and working capital.

3. Cash Flow Assessment:

• Cash at bank increased slightly to £50,376 from £46,675, indicating stable cash balances.
• Debtors remain high relative to turnover, suggesting potential credit risk or slow collections.
• Directors’ loan accounts increased significantly to £48,615, which is expected to be repaid within 9 months, supporting short-term liquidity.
• The reduction in stock levels and creditors suggests some working capital management.
• Finance lease obligations have decreased, which reduces fixed financial commitments.
  Liquidity appears adequate currently but requires ongoing scrutiny of debtor aging and cash conversion cycles to avoid strain.

4. Monitoring Points:

• Debtor collection efficiency and aging profile to prevent cash flow bottlenecks.
• Continued management of finance lease obligations and deferred income liabilities.
• Profitability trends and dividend payout policy, given dividends of £44,000 were paid during the period.
• Directors’ loan account repayment timelines to confirm liquidity support.
• Impact of any further asset disposals on operational capacity and financial stability.