Risk Assessment: ROBBIE WILSON LIMITED

1. Risk Rating: HIGH

Justification: The company exhibits significant net current liabilities (£301,703), a material deterioration in shareholders' funds from £182,059 to £67,775 (indicating a substantial loss of approximately £114,284 in the latest year), and a historical pattern of operating with razor-thin equity margins. While currently solvent due to tangible fixed assets, the working capital deficit and recent loss trajectory present serious concerns.

2. Key Concerns

Concern 1: Severe Working Capital Deficit

Current liabilities (£713,534) substantially exceed current assets (£411,831), resulting in net current liabilities of £301,703. This represents a significant deterioration from £169,281 in the prior year. The current ratio stands at approximately 0.58:1, meaning the company cannot meet its short-term obligations from liquid resources alone. The company is reliant on fixed assets (predominantly plant and machinery at £694,368 net book value) and continued trading cash flows to meet commitments.

Concern 2: Significant Loss in Latest Period

Shareholders' funds declined by approximately £114,284 (from £182,059 to £67,775), indicating a substantial loss for the year ended 31 January 2026. This reverses the positive trajectory seen in 2025 when net assets improved from £77,113 to £182,059. The P&L reserve dropped from £181,859 to £67,575. The volatility in profitability is concerning—net assets have swung from £490 (2019), to negative £38,453 (2022), to £1,044 (2023), to £182,059 (2025), and back down to £67,775 (2026).

Concern 3: Heavy Debt Burden from Finance Leases and Hire Purchase

Obligations under finance lease and hire purchase contracts total £501,327 (£294,694 current + £206,633 long-term), representing approximately 70% of total liabilities. These are secured against the assets to which they relate (primarily vehicles for this road freight operator). This creates a double vulnerability: if trading deteriorates further, lease payment defaults could result in asset repossession, which would directly impair the company's ability to generate revenue.

3. Positive Indicators

• Adequate Cash Position: Cash at bank of £287,643 has improved from £183,736, providing a reasonable liquidity buffer despite the working capital deficit. This suggests strong cash generation from operations or favourable debtor collection.

• Filing Compliance: Accounts and confirmation statements are filed on time with no overdue items. The company maintains its regulatory obligations, which is a basic but important governance indicator.

• Long Operating History: Incorporated in 2008, the company has operated through multiple economic cycles for over 17 years, demonstrating resilience despite thin margins.

• Employee Growth: Staff numbers increased from 37 to 40, suggesting management confidence in the business and ongoing operational demand.

• Substantial Tangible Asset Base: Net tangible assets of £744,705 (primarily plant and machinery) provide underlying asset backing, though liquidity of these assets is limited.

4. Due Diligence Notes

1. Profit & Loss Account Detail: The filed accounts are filleted (abbreviated), meaning no profit and loss account has been delivered to the Registrar. The actual revenue, cost of sales, and operating profit figures are unavailable. Obtaining full management accounts would be essential to understand the drivers of the £114,284 decline in shareholders' funds—specifically whether this reflects operating losses, exceptional items, or dividend payments.

2. Precon Holdings Limited: This corporate PSC owns 25-50% of shares, holds 25-50% of voting rights, and has the right to appoint and remove directors. The nature of this entity, its financial health, and its relationship with the company should be investigated. Related party transactions are not disclosed (the company uses the FRS 102 small entity exemption), which reduces transparency on inter-company dealings.

3. Trade Creditor Increase: Trade creditors doubled from £36,088 to £75,704. This should be investigated to determine whether this reflects extended payment terms (a potential cash management stress indicator) or simply timing of year-end purchases.

4. Asset Disposals: The company disposed of £223,560 (cost basis) of tangible assets during the year. Given the road freight nature of the business, understanding whether this represents fleet renewal or downsizing is important context.

5. Debtor Reduction: Total debtors fell from £290,947 to £124,188, with prepayments and accrued income dropping from £101,500 to just £788. Clarification is needed on whether this reflects improved collection, reduced business volume, or the resolution of a specific large debtor balance.

6. Going Concern Assessment: No explicit going concern statement or post-balance sheet events note is visible in the filleted accounts. Given the net current liabilities, confirmation should be sought that the director has appropriately assessed going concern status and that no material uncertainties exist.