Company Number: 14043182

Analysis Date: 2025-07-29 16:55 UTC

1. Risk Rating: MEDIUM
   RAEMECH LTD’s financial statements reflect a small but active private limited company with modest net assets and working capital. While the company is not currently overdue on filings and maintains positive net current assets, the low cash balance and increasing reliance on bank loans within a relatively short operating history introduce some liquidity and solvency concerns. The company’s small equity base and recent name change also warrant caution.

2. Key Concerns:

• Liquidity Pressure: Cash on hand is minimal (£389 at 31 March 2024) despite sizeable current assets (£214,860), indicating potential cash flow management issues or delays in converting debtors to cash.
• Increasing Short and Long-Term Debt: Current liabilities have more than doubled year over year, including bank loans now introduced (£30,949 current, £32,579 non-current), which raises questions about debt servicing capacity.
• Equity Erosion and Control Complexity: Net assets have reduced slightly from £17,275 to £15,144, and the complex shareholding structure with multiple PSCs owning significant shares may complicate governance or decision-making.

3. Positive Indicators:

• Compliance and Filing Timeliness: No overdue accounts or confirmation statements, indicating good regulatory compliance.
• Growing Business Scale: Increase in current assets and debtors from £91,858 to £214,860 and £41,646 to £139,471 respectively, suggesting business activity growth.
• Stable Operational Base: Tangible assets have increased modestly, and employee numbers have grown from 1 to 7, reflecting operational scaling.

4. Due Diligence Notes:

• Investigate the company’s cash flow cycle and debtor collection efficiency to understand liquidity risks.
• Clarify terms and conditions of bank loans and impact on future cash flows and covenant compliance.
• Review reasons for the name change and any related business restructuring or ownership changes.
• Assess interrelationships and potential conflicts between the three PSCs, particularly given the former director’s substantial shareholding and control rights.
• Examine the absence of an income statement disclosure and overall profitability trends to better understand earnings sustainability.