Investment Risk Analysis: PSW INTEGRITY LIMITED

1. Risk Rating: LOW

Justification: The company demonstrates strong solvency with net assets of £1,053,197 representing a 71% increase year-on-year, a healthy current ratio of approximately 2.88:1, and a cash position (£716,794) that exceeds total current liabilities (£537,048). No long-term debt exists as of the latest filing. The primary risks relate to trade debtor concentration and PSC register inconsistencies rather than immediate financial distress.

2. Key Concerns

Concern 1: Trade Debtor Concentration Risk

Trade debtors of £818,607 represent approximately 53% of total current assets and have grown 14% year-on-year (from £719,599). Without visibility into debtor aging or concentration (what proportion is owed by how many clients), this poses a material collection risk. If a significant debtor defaults or delays payment, working capital could be strained despite the healthy cash position.

Concern 2: PSC Register Inconsistencies

The Persons with Significant Control register presents conflicting ownership declarations: - Reliable Global Manufacturing Services Limited: >75% shares, >75% voting rights, right to appoint/remove directors - Psw Group As: 25-50% shares - Mr Ronald Garry McKay: >75% shares

These percentages are mathematically incompatible if referring to the same share class. This may indicate administrative error, different share classes with varying rights, or outdated filings. Given that Psw Group As appears to be a Norwegian entity (consistent with director Oddbjorn Haukoy's nationality), related party transactions and transfer pricing implications should be investigated.

Concern 3: Rapid Growth Sustainability

The company has experienced exceptional growth—net assets increased from £81,222 (2022) to £1,053,197 (2025), a twelve-fold increase over three years. Employee headcount grew 57% from 14 to 22 in the latest year alone. While the trajectory is positive, such rapid expansion in a consulting business typically strains quality controls, project delivery, and working capital management. The 2020 financial year showed similarly elevated assets (£1,146,000) followed by a significant decline, suggesting potential cyclicality or project-based revenue concentration.

3. Positive Indicators

Strong Liquidity Position

The cash ratio stands at 1.33:1 (cash of £716,794 against current liabilities of £537,048), meaning the company could settle all short-term obligations from cash alone without relying on debtor collections. This provides substantial operational flexibility and a buffer against disruptions.

Elimination of Long-term Debt

Amounts falling due after more than one year reduced from £5,208 to nil, indicating deliberate deleveraging. The company now carries no long-term financial liabilities, reducing fixed obligations and interest rate exposure.

Consistent Profitability

Retained earnings grew from £565,105 to £1,002,191—an increase of £437,086 representing the year's profit after tax. This follows prior year growth of £275,819 (from £289,286 to £565,105). The company has demonstrated sustained profitability over multiple years.

Regulatory Compliance

Accounts and confirmation statements are filed on time with no overdue filings. The company has maintained Active status throughout its 12-year history with no indications of insolvency proceedings or regulatory actions.

Tangible Asset Investment

Fixed assets increased from £4,986 to £54,608, with significant additions of £54,859 in computer equipment and fixtures, suggesting investment in operational capacity to support growth.

4. Due Diligence Notes

Priority Investigations:

1. PSC Structure Clarification: Request the full share capital structure, including share classes, rights attached to each class, and beneficial ownership chain. Investigate Reliable Global Manufacturing Services Limited and Psw Group As—jurisdiction, financial health, and relationship to the company.

2. Trade Debtor Analysis: Obtain debtor aging reports, identify top 10 debtors by value, and assess concentration risk. Determine whether debtor growth is proportional to revenue or indicates payment collection issues.

3. Revenue Sustainability: As a small company filing under Section 444(1A), the company has not delivered a Profit & Loss account. Request turnover figures, gross margins, and revenue concentration by client/sector to assess sustainability of the growth trajectory.

4. 2020 Financial Anomaly: Net assets were £523,318 in 2020 before dropping to £325,530 in 2021 and further to £81,222 in 2022. Investigate whether this reflected a major contract completion, client loss, or dividend distribution.

5. Provisions: Provisions increased from £1,247 to £13,652. Understand the nature of these provisions—whether they relate to warranties, litigation, restructuring, or other obligations.

6. Other Creditors: Current "other creditors" of £245,877 represents 46% of current liabilities. Clarify the nature of these obligations—whether they include related party balances, accruals, or contingent liabilities.

7. Related Party Transactions: Given the international PSC structure, request full disclosure of transactions with Psw Group As, Reliable Global Manufacturing Services Limited, and connected entities under FRS 102 Section 1A requirements.

8. Business Model Assessment: The company's website references "reliability engineers," "condition monitoring," and "LEAN management"—understand the revenue model (project-based vs. recurring), client retention rates, and contract pipeline visibility.