Company Number: 13147620

Analysis Date: 2025-07-20 17:29 UTC

1. Risk Rating: HIGH
   Rellycoms Ltd exhibits significant solvency and liquidity concerns based on the latest financial data. The company’s net current assets have deteriorated sharply into negative territory (£-23,706 as at 31 January 2024) due to a substantial increase in current liabilities, notably bank overdrafts. The sizeable bank loans both within one year (£23,251) and beyond one year (£11,458) raise concerns about the company’s ability to meet short-term obligations and service debt.

2. Key Concerns:

• Negative Working Capital: The current liabilities (£26,351) far exceed current assets (£2,645), indicating potential cash flow stress and inability to cover short-term debts.
• Increased Borrowings: Introduction of significant bank loans in 2024 compared to zero in prior years suggests reliance on external financing, increasing financial risk.
• Asset Liquidity Mismatch: Tangible fixed assets have increased to £45,916 but are not liquid. The company has minimal cash (£nil reported) and reduced debtors, limiting immediate funds to meet liabilities.

3. Positive Indicators:

• Growing Net Assets and Shareholders’ Funds: Despite liquidity issues, net assets increased from £9,601 in 2023 to £10,752 in 2024, reflecting some equity buffer.
• Stable Ownership and Management: The sole director and secretary, Mr Jarrel Stratton, maintains full control and has consistently managed the company since incorporation, showing governance continuity.
• Timely Filing and Compliance: The company’s accounts and confirmation statement filings are up to date with no overdue reports, indicating regulatory compliance.

4. Due Diligence Notes:

• Examine the nature and terms of the £34,709 total bank loans (current and non-current) to assess repayment schedules, interest rates, and covenants.
• Investigate recent cash flow statements and forecasts to evaluate the company’s ability to service debt and operational liquidity.
• Review the reason behind the sharp increase in liabilities within the last financial year and whether it corresponds to business expansion, restructuring, or financial distress.
• Confirm the valuation and usability of the tangible fixed assets (£45,916) as collateral or operational assets.
• Assess debtor quality and collection periods given the decline in trade debtors from £5,615 to £2,545.