Company Number: 13678599

Analysis Date: 2025-07-20 14:10 UTC

Credit Opinion:
DECLINE. Recreation Services Ltd shows persistent and increasing net liabilities over recent financial years, with shareholders’ funds deeply negative (£-21,455 as of 31 March 2024). The company has net current liabilities and relies heavily on long-term creditors (£23,159 due after one year). These factors indicate weak financial health and potential difficulties in servicing additional credit. The company is very young (incorporated 2021) with limited operational history and no evidence of profitability or asset growth to offset liabilities. The negative equity position and ongoing reliance on creditors suggest high credit risk.

Financial Strength:
The balance sheet reveals low fixed asset values (£2,616 net tangible assets) and no indication of significant intangible assets or investments. Current liabilities exceed current assets, resulting in negative working capital (£-912). Long-term liabilities have increased significantly from £16,704 to £23,159 in one year, worsening the company’s net liabilities from £-14,469 to £-21,455. Shareholders’ funds are negative and deteriorating, reflecting accumulated losses and insufficient capital injection. The financial trajectory is declining, and the company is not building a solid equity base.

Cash Flow Assessment:
Negative net current assets indicate potential liquidity constraints, limiting the company’s ability to meet short-term obligations without resorting to additional borrowing or equity injections. The small scale of operations (one employee) and absence of reported turnover or profit figures raise concerns about cash inflows. Dependence on creditor funding, as shown by increasing long-term payables, suggests cash flow pressures and limited internal cash generation.

Monitoring Points:

• Watch for any improvement in net assets and shareholder equity, especially through profit generation or capital injection.
• Monitor liquidity trends and working capital management closely, as ongoing negative net current assets could trigger cash flow crises.
• Review any changes in creditor terms, particularly related to long-term liabilities, to assess refinancing or repayment risks.
• Track company’s ability to generate turnover and profits in future filings to reassess creditworthiness.
• Keep an eye on director changes and ownership concentration for any governance or control risks.