RL SYSTEMS GROUP LIMITED

Executive Summary

RL Systems Group Limited exhibits financial distress with negative net assets and deteriorating liquidity, reflecting an inability to meet short-term obligations. The company’s small scale and lack of fixed assets limit its creditworthiness, resulting in a decline recommendation. Close monitoring of financial performance and liquidity metrics is essential if credit terms are considered in the future.

RL SYSTEMS GROUP LIMITED - Analysis Report

Company Number: 13869370

Analysis Date: 2025-07-19 12:20 UTC

1. Credit Opinion: DECLINE
   RL Systems Group Limited demonstrates deteriorating financial health, with net current liabilities of £16,056 at the latest reporting date (31 Jan 2024), a reversal from net current assets of £5,268 in the prior two years. This indicates worsening liquidity and an inability to cover short-term obligations from current assets. The company operates in a niche wholesale and repair sector with minimal fixed assets and a single employee, offering limited operational scale or asset backing. Given these factors, the company’s capacity to service debt or meet commercial credit terms is inadequate at present, posing a heightened credit risk.

2. Financial Strength:
   The balance sheet reveals no fixed assets and a steady decline in working capital. Shareholders’ funds moved from modest positive equity (£5,268) to a negative position (-£16,056), reflecting retained losses or increasing liabilities. The micro-entity status and minimal capital base further constrain financial flexibility. Absence of tangible assets and a negative net asset position reduce collateral availability and financial resilience.

3. Cash Flow Assessment:
   Current liabilities exceed current assets by over £16k, indicating poor short-term liquidity and potential cash flow stress. The company’s cash or equivalents are not separately disclosed but appear insufficient to cover immediate payables. With only one employee and presumably limited operations, cash inflows may be constrained. Without improvement in working capital or external funding, the company risks defaulting on its obligations.

4. Monitoring Points:

• Monitor subsequent accounts filings for any improvement in net current assets and reduction of liabilities.
• Watch for changes in ownership or capital injections that could strengthen equity.
• Track payment history with suppliers and any indications of late payments or defaults.
• Review strategic plans or operational changes that could enhance cash flow or profitability.
• Keep alert for director or management changes that could impact governance or financial stewardship.