RENEWABLE AND GRID SERVICES LIMITED

Executive Summary

Renewable And Grid Services Limited demonstrates high financial risk stemming from large negative working capital and shareholder deficits, indicating potential challenges in meeting obligations and sustaining operations. The company’s substantial intercompany liabilities and lack of profitability necessitate detailed due diligence, although timely filings and backing by a major shareholder provide some positive context.

RENEWABLE AND GRID SERVICES LIMITED - Analysis Report

Company Number: 13250883

Analysis Date: 2025-07-20 13:09 UTC

1. Risk Rating: HIGH
   Renewable And Grid Services Limited exhibits significant solvency concerns due to persistent and large negative net current assets and shareholders' funds. The company’s liabilities vastly exceed its current assets, indicating difficulty in meeting short-term obligations.

2. Key Concerns:

• Severe Negative Working Capital: As of 31 December 2022, net current assets were negative by approximately £73.8 million, worsening from the prior year’s £61.3 million negative figure. This large deficit signals liquidity stress and potential cash flow challenges.
• High Current Liabilities Relative to Assets: Current liabilities stood at £89.6 million against current assets of only £15.8 million. The bulk of liabilities are amounts owed to group undertakings (£79.9 million), which may indicate intercompany funding reliance or repayment risk.
• Persistent Negative Equity: The shareholders' funds declined from negative £1.26 million in 2021 to negative £6.33 million in 2022, reflecting ongoing losses or capital erosion, raising concerns about the company’s operational sustainability and capital adequacy.

3. Positive Indicators:

• Substantial Fixed Asset Investments: The company holds investments in group undertakings valued at £67.5 million, which could represent valuable long-term assets or strategic investments.
• No Overdue Filings: All statutory accounts and confirmation statements are filed on time, indicating compliance with regulatory requirements.
• Backed by Significant Shareholder: Habitat Energy Holdings Limited owns 75-100% of shares and voting rights, suggesting potential financial support or strategic interest from a substantial investor.

4. Due Diligence Notes:

• Nature and Recoverability of Debtors: Investigate the composition and collectability of trade and intercompany debtors totaling nearly £14.8 million, especially amounts owed by group undertakings.
• Intercompany Liability Structure: Clarify the terms, repayment schedules, and funding arrangements relating to the £79.9 million owed to group undertakings to assess refinancing or default risk.
• Business Model and Profitability: Obtain detailed profit and loss data and management commentary to understand the causes of persistent losses and the company’s path to profitability.
• Support from Parent or Group Entities: Confirm whether the controlling shareholder provides ongoing financial support, guarantees, or capital injections to sustain operations and service liabilities.
• Operational Activity: Review operational status since no employees are reported and turnover data is unavailable, to assess if the company is a holding entity or a dormant trading company with limited activity.

Executive Summary:
Renewable And Grid Services Limited currently faces a high risk profile primarily due to significant liquidity and solvency deficits, with current liabilities far exceeding current assets and negative equity deepening over recent years. While the company benefits from substantial fixed asset investments and majority ownership by a significant shareholder, further investigation is required into intercompany balances, operational viability, and financial support mechanisms to fully assess its stability and sustainability.