Company Number: 14226131

Analysis Date: 2025-07-20 12:13 UTC

1. Risk Rating: LOW

Proteus Marine Renewables Limited demonstrates strong solvency and liquidity metrics for a company incorporated recently (2022). The substantial net assets and positive working capital position indicate a low risk of insolvency at present. No overdue filings or regulatory compliance issues are apparent.

2. Key Concerns:

• Director Turnover: The company has experienced frequent changes in directors within a short timeframe, including recent resignations in 2023 and 2024. This could suggest governance instability or transitional challenges.
• Deferred Tax Provision: The company carries a significant deferred tax liability (£495,588 in 2023, down from £632,934 in 2022) which may impact future cash flows and profitability.
• Concentration Risk: A single individual (Mr. James William Dalrymple) holds majority control (50-75% shares and voting rights), potentially leading to governance risks related to minority shareholder protections.

3. Positive Indicators:

• Strong Financial Position: The company reports net assets of over £5.1 million and net current assets of approximately £2.6 million as at 31 December 2023, indicating healthy solvency.
• Adequate Liquidity: Cash balances exceed £1 million, supported by substantial debtors (£3.15 million), with current liabilities well covered.
• No Filing or Compliance Issues: All statutory accounts and confirmation statements are filed on time with no overdue status, reflecting good compliance.
• Asset Base: Tangible fixed assets valued at approximately £2.84 million support operational capacity and value.
• Industry Focus: The company operates in specialized design activities and manufacture of marine engines/turbines, sectors with growth potential linked to renewable energy trends.

4. Due Diligence Notes:

• Investigate the reasons behind the high director turnover, especially recent resignations, to assess governance stability and potential management risks.
• Review the nature and timing of the deferred tax liabilities to understand their impact on cash flow projections.
• Examine the quality and collectability of the substantial debtor balances, especially the amounts owed by group undertakings (£3.12 million).
• Confirm the valuation methods and assumptions for the revalued tangible fixed assets as these form a material part of the balance sheet.
• Assess shareholder agreements and control rights to understand minority protections and governance arrangements given the concentration of control.
• Evaluate the company’s business plan and cash flow forecasts to confirm ongoing operational sustainability beyond the current financial position.