S W HYGIENE LIMITED
Company number 02850937 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Credit Assessment: S W HYGIENE LIMITED
1. Credit Opinion: APPROVE
Rationale: S W Hygiene Limited presents a strong credit profile characterised by consistent net asset growth, a substantial cash position, and low leverage. The company has demonstrated an impressive trajectory, growing net assets from £416k (2017) to £1.59m (2025)—nearly quadrupling over eight years. The current ratio of 1.64x and cash holdings of £1.22m provide considerable liquidity headroom. The business operates in the essential waste collection sector, which provides defensive characteristics during economic downturns. Ownership is concentrated within the Sampson family, providing stability and aligned incentives. The only notable caution is the modest retained profit growth in the latest year (~£69k), which warrants monitoring but does not undermine the overall creditworthiness.
2. Financial Strength
Balance Sheet Summary (Year Ending 30 September 2025):
| Item | £ | Commentary |
|---|---|---|
| Fixed Assets | 1,112,827 | Primarily freehold property and plant |
| Current Assets | 1,813,455 | Dominated by cash (£1.22m) |
| Current Liabilities | (1,105,050) | Trade creditors, tax, other creditors |
| Net Current Assets | 708,405 | Healthy working capital position |
| Provisions | (230,144) | Long-term liability provisions |
| Net Assets | 1,591,088 | Strong equity base |
| Shareholders' Funds | 1,591,088 | Predominantly retained earnings |
Key Ratios:
| Metric | Value | Assessment |
|---|---|---|
| Current Ratio | 1.64x | Healthy - above 1.5x benchmark |
| Quick Ratio | 1.61x | Excellent - minimal stock dependency |
| Gearing (Liabilities/Equity) | 0.84x | Conservative leverage |
| Cash/Total Assets | 41.6% | Exceptional liquidity buffer |
| Net Assets Growth (YoY) | 4.5% | Positive but moderating |
Asset Quality: - Freehold property valued at £2.87m (cost) with no depreciation applied—directors consider residual value to equal cost, which is a reasonable approach for commercial property but inflates book value relative to depreciated assets. - Plant and machinery at £953k net book value after depreciation—significant operational asset base. - Goodwill fully amortised (£138k written off)—no remaining intangible asset risk. - Trade debtors of £457k increased 16.4% year-on-year—marginally above the growth in employees (9.3%), suggesting some debtor stretch but not alarming.
Equity Composition: - Share capital and reserves: £18,923 (minimal) - Retained earnings: £1,572,165 (98.8% of equity) - This demonstrates long-term profit retention and reinvestment rather than reliance on external capital.
Historical Trajectory:
| Year | Net Assets | Cash | Growth (Net Assets) |
|---|---|---|---|
| 2017 | £416,200 | £130,831 | — |
| 2018 | £534,832 | £249,053 | +28.5% |
| 2019 | £657,912 | £470,419 | +23.0% |
| 2020 | £670,890 | £680,206 | +2.0% |
| 2021 | £841,799 | £821,167 | +25.5% |
| 2022 | £1,211,642 | £994,269 | +43.9% |
| 2023 | £1,413,144 | £1,054,809 | +16.6% |
| 2024 | £1,522,293 | £999,958 | +7.7% |
| 2025 | £1,591,088 | £1,218,936 | +4.5% |
Growth has decelerated from the exceptional rates seen in 2021-2023 but remains positive. The cash position has recovered strongly after dipping in 2024, suggesting working capital management improved.
3. Cash Flow Assessment
Liquidity Position: Cash at bank stands at £1,218,936—representing approximately 42% of total assets. This is an exceptionally strong position for a business of this size and provides substantial coverage against current liabilities (1.10x cash coverage of current liabilities alone).
Working Capital Analysis:
| Component | 2025 £ | 2024 £ | Change |
|---|---|---|---|
| Stocks | 36,842 | 36,084 | +2.1% |
| Trade Debtors | 457,043 | 392,675 | +16.4% |
| Cash | 1,218,936 | 999,958 | +21.9% |
| Trade Creditors | 125,341 | 153,315 | -18.3% |
| Other Creditors | 612,155 | 577,499 | +6.0% |
| Taxation & SS | 367,554 | 250,828 | +46.5% |
Observations: - Trade debtors growing faster than trade creditors may indicate extended credit terms to customers or revenue growth outpacing collections. The debtor days calculation would require turnover data (not disclosed in filleted accounts). - The reduction in trade creditors suggests the company is paying suppliers faster—potentially to secure discounts or due to improved cash flow. - Taxation and social security increasing by 46.5% is notable—likely reflecting higher profitability and possibly the end of any pandemic-related deferrals. - "Other creditors" at £612k is a material balance. Without further breakdown, this could include accruals, director loan accounts, or other obligations. This should be clarified as part of due diligence.
Profitability Indicator: Retained earnings increased by £68,795 (£1,572,165 - £1,503,370), suggesting profit after tax of approximately this figure (assuming no dividends). This is modest relative to the asset base and may indicate either: - Higher depreciation charges (expected given the asset-intensive nature) - Increased operating costs - Investment in the business through capital expenditure (£279k additions)
The company invested £278,938 in tangible assets during the year, suggesting continued commitment to operational capacity.
Debt Service Capacity: - No long-term debt visible on the balance sheet (only current liabilities and provisions) - Hire purchase contracts reduced from £15,388 to nil—company has cleared HP obligations - The absence of bank borrowings and the strong cash position suggest the company could comfortably service additional debt if required
4. Monitoring Points
| Metric | Current Position | Threshold/Concern Level | Action Required |
|---|---|---|---|
| Cash Position | £1.22m | Below £800k | Monitor quarterly—any significant drawdown without corresponding asset growth warrants investigation |
| Trade Debtor Days | £457k outstanding | Increasing trend | Request turnover data to calculate debtor days; target <45 days for waste collection sector |
| Other Creditors | £612k | Above £700k | Seek breakdown—understand composition (accruals vs. director loans vs. trade-related) |
| Provisions | £230k | Increasing trend | Understand nature—likely deferred tax or warranty provisions; confirm no hidden liabilities |
| Net Asset Growth | 4.5% YoY | Below 2% or negative | Continued deceleration may signal margin pressure or market saturation |
| Employee Count | 59 (from 54) | Significant reduction | Headcount growth suggests expansion; reductions may indicate contraction |
| Filing Compliance | Current | Any overdue filings | Company has clean filing record; any lapse would be a red flag |
| Related Party Transactions | Not disclosed in filleted accounts | Material transactions | Request full accounts to assess director loans or inter-company balances |
| Freehold Property Valuation | £2.87m cost | Impairment indicators | Property not depreciated; monitor for indicators of impairment, particularly given Cornwall market |
| Sector Regulatory Changes | Ongoing | Material cost increases | Waste collection subject to environmental regulation; monitor policy changes affecting operations |
Additional Due Diligence Recommendations: 1. Request full (unfilleted) accounts to access the Profit & Loss statement—essential for proper assessment of trading profitability, margins, and interest coverage. 2. Obtain confirmation of the nature of "other creditors" (£612k) and provisions (£230k). 3. Verify the basis for non-depreciation of freehold property—ensure this aligns with FRS 102 requirements and that regular impairment reviews are conducted. 4. Understand the rationale for the company name change from BTE Services Limited (December 2023)—whether this reflects a strategic rebranding, change of ownership, or business model evolution. 5. Clarify the PSC register entries which appear to contain duplicates for Brian George Sampson—ensure this is an administrative matter rather than indicating complexity in ownership structure.