RED NINETEEN LTD

Executive Summary

Red Nineteen Ltd shows some liquidity strain and declining net assets despite being an active management consultancy company. Current liabilities exceed current assets, and cash balances have significantly decreased, indicating short-term funding pressures. Conditional credit approval is advisable, with close monitoring of cash flow, intra-group funding reliance, and financial performance improvements.

RED NINETEEN LTD - Analysis Report

Company Number: 14234454

Analysis Date: 2025-07-29 17:28 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Red Nineteen Ltd is a relatively new private limited company operating in management consultancy (SIC 70229) with active status and no insolvency proceedings. However, the latest financials show a decline in net assets from £20,105 (2023) to £6,875 (2024) and a negative working capital position (£-1,430), reflecting liquidity pressures. The company’s current liabilities (£147,010) slightly exceed current assets (£145,580), suggesting tight short-term funding. The significant reduction in cash from £280,108 to £140,580 year-on-year is a concern. Given these liquidity constraints, credit approval should be conditional on assurances of improved cash flow management or additional capital support from the controlling shareholder, JKW Group Holdings Limited, which owns 75-100% of shares.

2. Financial Strength Analysis
   The balance sheet shows modest fixed assets (£11,073) and a heavy reliance on current assets, mainly cash. The decline in net assets is due in part to provisions for liabilities (£2,768) introduced in 2024. Shareholders' funds have reduced significantly, signaling erosion of retained earnings or losses during the year. The company’s total assets less current liabilities dropped from £20,105 to £9,643, indicating weakening solvency. Despite this, the company remains small with no audit requirement and limited employees (1). The financial structure is fragile but not insolvent, relying heavily on shareholder backing.

3. Cash Flow Assessment
   Cash at bank halved year-on-year and working capital turned negative, suggesting cash flow pressures. Debtors are low (£5,000) but stable. Current liabilities remain high and include a large amount owed to group undertakings (£72,000), indicating intra-group funding reliance. Taxation and social security liabilities are sizeable (£34,681). The company’s ability to meet short-term obligations without external funding appears compromised. Monitoring cash conversion cycles and creditor payment terms will be important to assess ongoing liquidity risk.

4. Monitoring Points

• Cash balance and working capital trends each quarter to detect further liquidity deterioration.
• Timely settlement of tax and social security liabilities to avoid penalties.
• Movements in amounts owed to group undertakings to understand intra-group financing dependency.
• Profitability and retained earnings movement in future accounts to gauge recovery or further erosion.
• Any changes in controlling party support or capital injections.