PORTLAND ELECTRICAL AND MECHANICAL SERVICES LIMITED

Executive Summary

Portland Electrical and Mechanical Services Limited demonstrates moderate financial stability with strong working capital and asset growth. However, significant finance lease liabilities, a large director loan, and declining net assets introduce medium solvency and liquidity risks. No regulatory compliance issues are evident, but further review of lease obligations and director loans is recommended to fully assess operational sustainability.

PORTLAND ELECTRICAL AND MECHANICAL SERVICES LIMITED - Analysis Report

Company Number: 13538607

Analysis Date: 2025-07-20 16:47 UTC

1. Risk Rating: MEDIUM
   The company shows a positive net asset position and reasonable net current assets, but significant finance lease obligations and a large director loan balance merit caution. The relatively short operating history (since 2021) and limited employee base contribute to moderate operational risk.

2. Key Concerns:

• Substantial Finance Lease Obligations: Total future minimum lease payments of £293,009 represent a significant liability relative to net assets (£204,692), posing potential cash flow strain.
• Director Loan Exposure: A large unsecured director loan receivable of £270,296 may impact liquidity if repayment terms are not met or if it reflects working capital support.
• Declining Net Assets: Net assets decreased from £303,893 in 2023 to £204,692 in 2024, driven partly by increased provisions and lease liabilities, which could indicate emerging financial stress.

3. Positive Indicators:

• Strong Net Current Assets: The company maintains a healthy working capital position (£300,709) supporting short-term solvency.
• No Filing or Compliance Issues: All filings including accounts and confirmation statements are up to date with no overdue notices.
• Growing Fixed Assets: Tangible fixed assets increased significantly, indicating investment in operational capacity, which may support future revenue growth.

4. Due Diligence Notes:

• Examine Lease Agreements: Review terms and conditions of finance leases to assess impact on cash flow and risk of default.
• Director Loan Terms: Clarify repayment arrangements and assess the risk of non-recovery of the large director loan balance.
• Profitability and Cash Flow Trends: Obtain P&L data and cash flow statements to understand operational sustainability and reasons for net asset decline.
• Provision Details: Investigate the nature of increased provisions (£26,171) to understand contingent liabilities or risks.