Company Number: 12645941

Analysis Date: 2025-07-20 14:56 UTC

1. Credit Opinion: DECLINE

PACE Otter Energy Limited demonstrates persistent negative net assets and shareholders' funds since incorporation, indicating ongoing losses and erosion of equity. The company’s net current liabilities position worsened to £2,500 in 2024 from £1,700 in 2023, signaling liquidity stress. The entire current liabilities are largely amounts owed to group undertakings, suggesting reliance on related party funding rather than external creditworthiness. There is no indication of profitability or positive cash flow generation to service new debt. Given these financial weaknesses and lack of clear turnaround, extending credit without substantial safeguards is not advisable.

2. Financial Strength:

The company's financial position is weak. It reports net liabilities of £2,500 as of 31 January 2024, worsening from £1,700 the previous year. Shareholders’ funds are negative and deteriorating, reflecting accumulated losses in the profit and loss reserve of £2,600. Current assets remain flat at £36,487, primarily work in progress stock, with minimal trade debtors (£100), while current liabilities have increased slightly to £38,987. There are no fixed assets reported, and the balance sheet indicates the company is insolvent on an accounting basis. The share capital of £100 is unpaid, further undermining financial solidity.

3. Cash Flow Assessment:

The company shows negative net current assets and relies heavily on amounts owed to group companies (£38,187), which represent intercompany liabilities rather than external credit. The lack of cash or liquid assets and an absence of trade debtors suggest cash generation from operations is minimal or negative. Working capital is insufficient to meet short-term obligations. The dependence on related party funding raises concerns regarding the sustainability of liquidity. No evidence of cash flow improvement or debt servicing capacity is observed.

4. Monitoring Points:

• Track changes in net current liabilities and net assets to detect any improvement in solvency.
• Monitor the company's ability to convert work in progress stock into revenue and cash.
• Review any changes in related party funding arrangements to assess liquidity risks.
• Observe profitability trends and operating cash flows in future accounts filings.
• Confirm directors’ plans for capital injection or restructuring to restore financial health.