Company Number: 13811347

Analysis Date: 2025-07-20 13:28 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   RD Media Group Ltd is an active private limited investment holding company with a modest operating history since incorporation in December 2021. The latest audited accounts to 31 January 2023 show a significant operating loss (£866,969 loss before tax) and net liabilities (£647k). However, the auditor’s report confirms the financial statements were prepared on a going concern basis with no material uncertainty. The company benefits from strong backing by significant shareholders (Scaleup Capital Ltd holding 50-75%) and a capable finance director in place. Given the business is still in its early growth phase, credit approval is conditional on regular financial monitoring and maintenance of shareholder support.

2. Financial Strength
   The company’s balance sheet shows intangible assets (goodwill) of around £2.69m on the group basis, representing investments in subsidiaries. Current assets are healthy at approximately £3.5m (mostly debtors), with current liabilities at £516k, resulting in positive net current assets and working capital. However, long-term creditors exceed total net assets by nearly £5.9m, resulting in negative shareholders’ funds. This leverage raises concerns about solvency if operating losses persist or if shareholder funding is withdrawn. The company’s financial strength depends heavily on continued capital injections and successful realization of investment value.

3. Cash Flow Assessment
   Cash at bank is low at £43k on a standalone company basis, though group cash is higher (£3.8m). Debtors form the bulk of current assets and may represent amounts due from group entities or related parties, which could be less liquid. Positive net current assets reflect short-term liquidity, but cash conversion risk exists if debtors are not promptly collected. The company’s operating losses and negative equity underscore the need for ongoing working capital support. Cash flow sufficiency to meet short-term obligations depends on careful debtor management and shareholder funding.

4. Monitoring Points

• Quarterly review of cash flow forecasts and debtor aging to ensure liquidity adequacy.
• Monitor operating performance of subsidiaries contributing to goodwill and assess impairment risks.
• Track compliance with financial covenants linked to long-term creditors.
• Review shareholder funding commitments and any changes in ownership/control that could affect capital support.
• Keep watch on director appointments and governance stability to ensure sound financial stewardship.