SHELBACK LIMITED
Company number 04304898 · 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 Analysis: SHELBACK LIMITED
1. Credit Opinion: CONDITIONAL
The credit decision is CONDITIONAL with significant reservations. While the company has demonstrated a recovery trajectory from deep insolvency (net assets of -£195,553 in 2018) to a marginally positive position (£28,396 in 2024), the balance sheet remains fundamentally weak with extremely high leverage and minimal equity buffer. Any credit facility would require robust security and personal guarantees from the PSCs.
Key concerns: - Net assets represent only 7.5% of total assets – dangerously thin equity cushion - Multiple years of technical insolvency in recent history (2015-2020) - Operating in a structurally declining industry (physical media wholesale) - Micro-entity filing provides limited financial transparency
2. Financial Strength
Balance Sheet Composition (FY2024): - Total Assets: £376,626 - Total Liabilities: £348,230 - Net Assets: £28,396 - Gearing: Liabilities represent 92.5% of total assets
Equity Trajectory: | Year | Net Assets | Movement | |------|-----------|----------| | 2018 | -£195,553 | Trough | | 2019 | -£115,215 | +£80,338 | | 2020 | -£75,909 | +£39,306 | | 2021 | £4,862 | +£80,771 | | 2022 | £21,493 | +£16,631 | | 2023 | £9,785 | -£11,708 | | 2024 | £28,396 | +£18,611 |
The recovery from insolvency is noteworthy, but the 2023 dip (net assets falling from £21,493 to £9,785) demonstrates ongoing fragility. The equity base remains wafer-thin – a relatively modest adverse event could push the company back into negative net worth.
Share capital stands at only £530, meaning virtually all equity derives from accumulated profits – highlighting how close the company remains to technical insolvency.
3. Cash Flow Assessment
Liquidity Position: - Current Assets: £376,626 (FY2024) - Current Liabilities: £348,230 - Current Ratio: 1.08x – barely adequate
All liabilities fall due within one year (no long-term debt visible), creating significant refinancing risk. The current ratio of 1.08x leaves virtually no margin for working capital disruption.
Cash Volatility Concern: Historical cash positions demonstrate extreme fluctuation: - 2018: £10,058 (critically low) - 2020: £114,904 - 2021: £210,319 - 2022: £183,348
Cash data is not disclosed for 2023-2024, which is a transparency gap inherent in micro-entity filings.
Working Capital Assessment: Net current assets of £28,396 provide minimal headroom. The company operates with 3 employees in a wholesale business that likely requires inventory carrying – yet no breakdown between stock, debtors, and cash is available. This opacity is a material credit concern.
4. Monitoring Points
| Metric | Target | Current Status |
|---|---|---|
| Net Assets | Positive & growing | £28,396 – marginal |
| Current Ratio | >1.2x | 1.08x – below target |
| Leverage (Debt/Assets) | <75% | 92.5% – significantly above |
| Filing Compliance | Current | Current – next accounts due 30/09/2027 |
Ongoing Monitoring Requirements:
- Quarterly management accounts – essential given micro-entity filing limitations
- Cash position tracking – historical volatility warrants close monitoring
- Trade creditor ageing – all debt is current; monitor for stretching payment terms
- Industry headwinds – physical media wholesale faces secular decline from streaming/digital
- PSC stability – ownership split across three individuals with overlapping thresholds (potential governance complexity)
- Net asset trajectory – watch for reversal toward insolvency levels
Security Requirements if Approved: - Fixed and floating charge over all assets - Personal guarantees from PSCs (Garreth Ryan, Lesley Appel, Jonathan Appel) - Minimum net asset covenant of £20,000 - Minimum current ratio covenant of 1.1x