OYSTER CABS LIMITED

1. Credit Opinion: APPROVE Oyster Cabs Limited presents a fundamentally sound credit profile characterized by a strong equity base and low leverage. The company has successfully transitioned from a position of negative net assets in 2021 (£-15.6k) to substantial positive equity of £217k in 2025. The most recent filing shows a deliberate deleveraging strategy, with current liabilities nearly halved from £82k to £37k. However, this debt repayment, combined with a reported trading loss (evidenced by a £14.4k drop in retained earnings), has significantly depleted cash reserves. Approval is recommended, but conditions should include monitoring cash flow adequacy and confirming the stabilization of recent operational contractions.

2. Financial Strength The balance sheet health is robust, with net assets of £217,671 as of May 2025. The company is asset-heavy, with tangible fixed assets (primarily motor vehicles) totaling £192,430 at net book value. Total liabilities stand at just £37,065, all of which are current, meaning the business carries no long-term debt. The equity position is entirely organically generated (share capital is a nominal £2, with the remainder in retained earnings), demonstrating historical profitability and sound financial stewardship. The transition from negative equity in 2021 to a highly solvent position today indicates strong resilience and a conservative capital structure.

3. Cash Flow Assessment Liquidity has tightened considerably over the latest financial year. Cash at bank fell from £76,302 to £38,644—a drop of nearly 50%. However, this must be contextualized alongside the sharp reduction in current liabilities (from £82,093 to £37,065). The cash was primarily utilized to clear creditors, notably Corporation Tax (down from £22.7k to £0.6k) and social security liabilities (down from £22.8k to £11.7k). Net current assets remain positive at £8,651, yielding a current ratio of approximately 1.23x. While this covers short-term obligations, the margin is slim. Working capital management appears aggressive; debtors have also been reduced significantly (£13.7k to £7k), but if the company faces operational disruptions, the lower cash buffer offers less of a safety net than the prior year.

4. Monitoring Points * Profitability Decline: The 2025 accounts are filleted, omitting the P&L, but the reduction in retained earnings (£232,100 to £217,669) confirms a post-tax loss of £14,431. The underlying cause of this profitability dip must be understood to ensure it does not persist. * Cash Runway: Cash has halved. Monitor monthly management accounts to ensure operating cash flow remains sufficient to service ongoing trade and tax liabilities without jeopardizing the business. * Fleet Capital Expenditure: The company actively manages its vehicle fleet, with significant disposals and additions in 2025. Ensure that future capital requirements for fleet replacement can be funded from operational cash flow rather than requiring new debt. * Operational Contraction: Average employee numbers dropped from 12 to 9. Assess whether this reflects operational efficiency gains or a reduction in business volume that could impact future revenue generation.