Company Number: 15127368

Analysis Date: 2025-07-29 12:27 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Refract Productions Limited is a newly incorporated company (since September 2023) operating in the advertising agency sector. The company currently shows a net liability position (£18,095 negative shareholders’ funds) and negative working capital (£18,224), reflecting initial start-up financial strain. However, the company is supported by a parent shareholder (Connective3 Limited) holding 75-100% control, which may provide financial backing. Approval is conditional on evidence of ongoing shareholder support and monitoring of cash flow improvements. Lending should be cautious due to the early stage of the business and current financial weakness.

2. Financial Strength:
   The balance sheet shows minimal fixed assets (£172) and current assets of £84,564, mainly trade debtors (£56,417) and cash (£28,147). Current liabilities are £102,788, including a significant amount owed to group undertakings (£81,267), suggesting intra-group funding rather than external debt. Net assets are negative mainly due to accumulated losses during the initial period. This is typical for a start-up but indicates limited financial resilience. The company’s small scale (2 employees) limits operational risk exposure but also its capacity to generate rapid scale.

3. Cash Flow Assessment:
   Cash of £28,147 provides some immediate liquidity, but negative working capital signals tight short-term funding. The large creditor balance to the parent group may be structured as a shareholder loan, which could be flexible, but external creditors may have limited protection. The company must demonstrate effective debtor collection and prudent management of payables to avoid liquidity issues. No income statement was filed, but as a start-up, cash flow projections and regular updates on receivables/payables will be critical.

4. Monitoring Points:

• Regular updates on cash flow and liquidity, especially debtor collections and creditor management.
• Ongoing shareholder support from Connective3 Limited to sustain operations.
• Progress in generating positive net assets and working capital improvements in future filings.
• Directors’ adherence to governance and financial controls given small management team.
• Watch for any overdue filings or changes in company status that could signal operational issues.