RELLYCOMS LTD

Executive Summary

Rellycoms Ltd is currently facing elevated financial risk primarily due to significant negative working capital and increased bank borrowings, which raise concerns about short-term liquidity and solvency. While the company maintains regulatory compliance and has a stable management structure, the reliance on external debt and cash flow strain warrant careful scrutiny. Further analysis of debt terms and operational cash flows is essential to fully understand the company’s financial resilience.

RELLYCOMS LTD - Analysis Report

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.