PRECISION EQUIPMENT LTD

Risk Rating: HIGH Justification: The company exhibits a severe and unexplained collapse in its balance sheet, moving from total assets of £128,759 and shareholders' funds of £110,174 in 2022 to just £100 in both categories for 2023, 2024, and 2025. This drastic reduction, combined with opaque governance structures and minimal financial disclosure due to micro-entity exemptions, presents significant solvency and operational concerns.

Key Concerns: * Drastic Asset and Equity Depletion: The sudden drop in total assets and shareholders' funds from six-figure sums to a nominal £100 between 2022 and 2023 is a critical red flag. This suggests either a complete cessation of trading, a distribution of capital, or a transfer of assets out of the company, leaving it with negligible financial substance. * Governance and Control Discrepancy: The sole registered director is Peter Oliver Jackson, yet the Persons with Significant Control (PSCs) are P J Innovations Limited (owning >75%) and Mr/Mrs Tee (owning 25-50% each). This disconnect between management and ownership raises questions regarding nominee directorship and actual operational control. Furthermore, the cumulative PSC ownership percentages appear to exceed 100%, indicating potential reporting anomalies or overlapping indirect ownership that requires clarification. * Lack of Financial Transparency: As a micro-entity filing under FRS 105, the company provides no Profit and Loss account, no breakdown of current assets, and no cash flow statement. Consequently, it is impossible to determine from the filed data alone whether the asset depletion was the result of severe trading losses, dividend stripping, or an intra-group reorganization.

Positive Indicators: * Regulatory Compliance: The company is actively registered and currently up to date with its statutory filing obligations. The accounts for the year ending 31 December 2025 were approved and signed promptly on 29 January 2026, and the confirmation statement is not overdue. * Absence of Insolvency Proceedings: The company is not flagged as in liquidation, administration, or receivership, and there are no documented disqualification orders against the director. * Historical Longevity: Incorporated in 2012, the company successfully maintained operations and a healthy balance sheet (peaking at £382,126 in total assets in 2020) for a decade prior to the recent financial contraction, indicating it previously possessed a viable business model.

Due Diligence Notes: * Investigate P J Innovations Limited: Conduct a thorough examination of the corporate PSC to identify its ultimate beneficial owners, financial health, and the nature of its relationship with the director and the individual PSCs. * Clarify Asset Disposition: Direct inquiries should be made to understand the exact mechanism that reduced the balance sheet from £128,759 to £100. Determine if the business was sold, if assets were transferred to a related party, or if the company has simply ceased trading and distributed its reserves. * Verify Operational Status: Ascertain whether the company is still actively engaged in "Repair of machinery" (SIC 33120) or if it is now operating as a dormant or non-trading shell. If active, request internal management accounts to verify how ongoing operations are being funded given the absence of balance sheet assets. * Resolve PSC Overlap: Clarify the PSC register discrepancy where ownership percentages appear to exceed 100%. Determine if Mr and Mrs Tee hold their interests indirectly through P J Innovations Limited rather than directly.