PHOTONICS EXPRESS LTD

Executive Summary

Photonics Express Ltd has shown a positive turnaround in financial position over the last year with improved net assets, liquidity, and cash coverage of liabilities. The company is relatively small but appears capable of servicing its debts at present. Continued monitoring of debt levels and debtor management is advised to mitigate risks associated with its modest scale and leverage.

PHOTONICS EXPRESS LTD - Analysis Report

Company Number: 13217501

Analysis Date: 2025-07-29 14:53 UTC

1. Credit Opinion: APPROVE with conditions
   Photonics Express Ltd demonstrates improving financial health with a turnaround from negative net assets in 2023 to positive net assets of £33,165 as of March 2024. The company shows growing current assets and cash balances, indicating better liquidity. However, the bank loan of £60,000 and director loans require monitoring to ensure ongoing servicing ability. Approval is recommended with conditions including regular review of cash flow and debt servicing capability, given the relatively small scale of operations and limited employee base.

2. Financial Strength:

• Net assets increased from a negative £10,207 (2023) to a positive £33,165 (2024), driven by improved retained earnings and asset growth.
• Tangible fixed assets are modest (£11,041) but steady, supporting the company’s operational base.
• Shareholders’ funds have risen substantially, reflecting profitability or capital injections.
• Long-term liabilities increased to £60,000 bank loans, which represent a material leverage for a small company but currently manageable given assets and cash.
• Overall, balance sheet strength has improved but remains modest in scale.

3. Cash Flow Assessment:

• Current assets of £97,157 include a healthy cash position of £58,443, more than covering current liabilities (£15,033), resulting in strong net current assets (£82,124).
• Trade debtors increased significantly to £36,612, which warrants regular monitoring to avoid liquidity strain.
• Director loans within current liabilities decreased from £5,456 to £3,362, suggesting some repayment progress.
• The company’s cash coverage of short-term obligations is sound, reducing immediate liquidity risk.

4. Monitoring Points:

• Track debtor collection efficiency closely to maintain liquidity.
• Monitor bank loan repayments and interest servicing to avoid covenant breaches or refinancing risks.
• Watch for changes in profitability and retained earnings to sustain net asset growth.
• Keep an eye on any changes in operational scale or employee count that may impact cost structure.
• Ensure timely filing of accounts and confirmation statements to maintain regulatory compliance.