PHISTONE SOURCING LTD

Executive Summary

Phistone Sourcing Ltd is a newly formed private limited company with severely negative net assets and working capital deficits, reflecting financial distress at an early stage. The company currently lacks operational cash flow and relies heavily on debt financing, signaling a high credit risk. Without clear evidence of imminent revenue generation or capital support, the credit recommendation is to decline new lending facilities at this time.

PHISTONE SOURCING LTD - Analysis Report

Company Number: 15396937

Analysis Date: 2025-07-20 18:25 UTC

1. Credit Opinion: DECLINE. Phistone Sourcing Ltd is a newly incorporated entity (January 2024) with a first accounting period ending December 2024. The financials reveal a weak liquidity position with current liabilities (£8,327) vastly exceeding current assets (£124), resulting in a significant negative net working capital (-£8,203). More concerning is the substantial long-term debt (£27,084) creating total net liabilities of -£34,385 and a shareholders' deficit, which indicates insolvency from a balance sheet perspective. There is no revenue or profit data presented, and the company employs no staff, suggesting minimal operational activity. The heavy indebtedness and negative equity imply an inability to service debt obligations and poor financial resilience.

2. Financial Strength: The balance sheet shows minimal fixed assets (£1,402) and negligible current assets (£124), mainly prepayments and cash (£32). The company’s creditors are heavily skewed to loans and borrowings (£27,084) plus other creditors, totaling £35,911 liabilities exceeding assets. Negative net assets and shareholders' funds reflect accumulated losses or initial funding shortfalls. This financial structure is typical of a start-up but, without operating revenue or cash flow generation, it is a high credit risk. The presence of related party control (Phistone Holdings Ltd 75-100% ownership) may indicate some funding support but does not mitigate current financial weakness.

3. Cash Flow Assessment: Cash at bank is very low (£32), insufficient to cover even a fraction of current liabilities (£8,327). Debtors are minimal and represent prepayments rather than trade receivables, indicating no current cash inflows from operations. Working capital is negative, suggesting the company is reliant on external funding or shareholder loans to meet short-term obligations. There is no evidence of operational cash flow generation, which raises concerns about liquidity and the ability to meet upcoming payments.

4. Monitoring Points:

• Future trading performance: revenue generation and profit margins need to be monitored closely.
• Debt servicing capacity: interest and principal repayments on loans must be tracked.
• Cash flow improvements: changes in working capital, especially debtor collections and creditor payment terms.
• Capital injections or restructuring: any equity funding or debt refinancing.
• Director and shareholder support: willingness and ability of controlling shareholder to provide financial backing.