PROCEED SOLUTIONS LTD

Risk Rating: LOW The company demonstrates strong financial health characterized by consistent organic growth, robust liquidity, and an absence of external debt. Net assets have grown significantly from £99,878 in 2019 to £839,631 in 2025, while maintaining a healthy cash position of £1,241,331. Regulatory compliance appears strict, with clean, timely filed accounts and an unqualified audit opinion confirming the going concern basis.

Key Concerns: * PSC Ownership Discrepancy: The Persons with Significant Control register lists three individuals (Barrie Brian Richards at 25-50%, Mark Anthony Day at 25-50%, and Stephen John Broughton at >75%) whose cumulative stated ownership and voting rights mathematically exceed 100%. This discrepancy requires clarification to understand the true control structure and potential related-party dynamics. * Scaling Liabilities: While the company boasts strong liquidity, total liabilities have grown substantially in tandem with total assets (rising from £617,306 in 2019 to £3,809,599 in 2025). Without a breakdown of current vs. non-current liabilities, there is a risk that aggressive trade payable accumulation or operational accruals could strain future working capital if revenue growth stalls. * Sector and Margin Vulnerability: Operating in the commercial cleaning sector (SIC 81210/81222), the business is inherently exposed to labor availability risks and tight margins. Although management notes that 95% of staff are paid the real living wage—mitigating retention risk—labor cost inflation remains a structural threat to their 22.39% gross margin.

Positive Indicators: * Exceptional Liquidity and Zero Borrowings: The company holds over £1.24 million in cash and explicitly states it operates without any borrowing. This provides a substantial buffer against economic shocks and interest rate fluctuations. * Strong Growth Trajectory: Turnover increased by approximately 38.7% in the latest fiscal year (reaching £17.69M), accompanied by a slight improvement in gross profit margins (from 22.12% to 22.39%), indicating scalable and profitable growth. * Unqualified Audit and Regulatory Compliance: Accounts are filed on time, and the external auditors (James Todd and Co Limited) have issued a clean opinion with no material uncertainties regarding the company's ability to continue as a going concern.

Due Diligence Notes: * Clarify PSC Structure: Investigate the exact shareholding distribution and voting rights to resolve the >100% overlap in the PSC register. Determine if there are differing share classes or if joint holdings are being reported individually. * Liability Composition: Obtain the full balance sheet and notes to the accounts to analyze the split between current and long-term liabilities, specifically focusing on trade payables days outstanding and any deferred income or accrued expenses. * Client Concentration: Given the rapid revenue growth and mention of "Tier 1 contractor approval" and "Property Management clients," assess whether revenue is overly concentrated in a few key contracts, which could pose a systemic risk if lost. * Director Appointment Timeline: Note that director Tom Barrie Richards was appointed on 23 September 2025 (post year-end). Verify the current board structure and ensure all statutory registers are updated accordingly.