PRE ENGINEERING LIMITED

Executive Summary

PRE ENGINEERING LIMITED is an active small private engineering firm with positive net assets but exhibiting some liquidity stress and increased long-term indebtedness, including a director’s loan with unclear terms. Compliance with statutory filings is up to date, but further examination of cash flow and debt structure is recommended to fully assess solvency and operational sustainability risks.

PRE ENGINEERING LIMITED - Analysis Report

Company Number: NI694727

Analysis Date: 2025-07-29 12:27 UTC

1. Risk Rating: MEDIUM
   The company shows a positive net asset position but a notable decline in net assets and increased long-term liabilities from the prior year. The presence of a directors' loan with no repayment terms and reduced cash reserves highlight potential liquidity risks.

2. Key Concerns:

• Liquidity Pressure: Cash at bank has decreased significantly from £20,080 to £6,577, while current liabilities remain high, indicating potential cash flow constraints.
• Increased Long-Term Debt: Creditors due after one year have halved but still stand at £19,552, including a sizeable director’s loan (£6,970) with no repayment schedule or interest, which may pose refinancing risk.
• Declining Net Assets: Net assets decreased from £2,984 to £2,099 year-on-year, suggesting erosion of equity that may impact solvency if the trend continues.

3. Positive Indicators:

• Positive Net Current Assets: The company maintains positive net current assets (£4,278) as of the latest year-end, indicating short-term solvency.
• No Filing or Compliance Issues: All statutory accounts and confirmation statements are filed on time with no overdue filings reported.
• Experienced Director and Control Structure: Single director with engineering background and full ownership control facilitates clear decision-making and oversight.

4. Due Diligence Notes:

• Investigate the nature, terms, and repayment prospects of the director’s loan of £6,970 and other long-term creditors to assess refinancing or default risk.
• Review cash flow forecasts and working capital management given the sharp decline in cash reserves over the year.
• Obtain details on turnover, profitability, and operational performance, which are not disclosed in the filed accounts, to better understand business sustainability.
• Confirm whether the company’s depreciation policies and asset valuations reflect true economic conditions, given the significant fixed asset base under hire purchase.
• Verify any contingent liabilities or off-balance sheet commitments which could impact financial stability.