PHILLIPS AUTOMOTION LIMITED

Executive Summary

Phillips Automotion Limited is an early-stage private company operating in the automotive sector that currently presents significant financial risk due to a negative net asset position and liquidity shortfall. While statutory compliance is up to date and the business has a diversified automotive activity base, its limited operating history and working capital deficit warrant close scrutiny. Further investigation into funding strategies and operational performance is essential to assess viability.

PHILLIPS AUTOMOTION LIMITED - Analysis Report

Company Number: 14849902

Analysis Date: 2025-07-29 17:41 UTC

1. Risk Rating: HIGH
   Phillips Automotion Limited exhibits a high risk profile primarily due to its negative net asset position within its first financial year, limited current assets relative to current liabilities, and minimal operating history.

2. Key Concerns:

• Negative Net Assets: The company reported net liabilities of £10,603 as at 31 May 2024, indicating it is technically insolvent on a balance sheet basis. This raises concerns about its ability to meet obligations without additional funding.
• Liquidity Shortfall: Current assets stand at £8,786 against current liabilities of £19,389, resulting in a working capital deficit of approximately £10,603. The cash balance of £7,200 is insufficient to cover immediate liabilities.
• Limited Operational Track Record and Scale: Incorporated in May 2023 and with only one employee (the director), the company is in its infancy. This limits visibility on operational sustainability, cash flow generation, and future profitability.

3. Positive Indicators:

• Compliance and Governance: The company is active, with no overdue filings for accounts or confirmation statements, indicating adherence to statutory obligations.
• Clear Ownership and Control: Mr. Jason Phillip Martin owns 75-100% of shares and voting rights, simplifying governance but also indicating concentrated control.
• Industry Diversification Within Automotive Sector: The company operates across multiple related SIC codes (sale, maintenance, manufacture of motorcycles and parts, sale of used vehicles), which may provide avenues for revenue diversification once established.

4. Due Diligence Notes:

• Cash Flow Projections and Funding Plans: Investigate how the company plans to address the current working capital deficit and negative equity. Ascertain sources of additional capital or borrowing facilities.
• Revenue and Profitability Trends: Obtain management accounts or interim financial data to understand if revenues are growing and if operational losses are reducing.
• Director Background and Related Party Transactions: Verify the experience and track record of the sole director in automotive manufacturing and sales. Review any transactions with related parties or loans from the director that support liquidity.
• Customer and Supplier Contracts: Assess the stability and duration of key contracts to evaluate operational sustainability and revenue visibility.
• Contingent Liabilities or Off-Balance Sheet Obligations: Confirm absence of significant liabilities not reflected in the accounts.

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