SIMPATICA DEVELOPMENT LIMITED

Executive Summary

Simpatica Development Limited exhibits a concerning decline in financial health with sharply reduced net assets and a negative working capital position in its latest accounts. While the company remains active and compliant with filings, liquidity is tight and cash reserves minimal. Credit approval is conditional on close cash flow monitoring and management of creditor/payor relationships to ensure ongoing debt servicing capability.

SIMPATICA DEVELOPMENT LIMITED - Analysis Report

Company Number: 13659930

Analysis Date: 2025-07-20 17:56 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Simpatica Development Limited is a very young private limited company in the software development sector with only a few years of trading history. The financials for the latest year ended October 2024 show a significant deterioration in working capital and net assets compared to prior years, which raises concern. The company’s current liabilities have more than tripled while current assets have declined, resulting in a negative net current asset position (-£386). Net assets have sharply dropped from £32,429 in 2023 to only £300 in 2024. This suggests financial stress or a liquidity crunch. However, the company remains active, has no overdue filings, and is managed by directors with significant control and involvement. Given the early stage and volatility, credit should be extended with caution and subject to close monitoring of cash flow and creditor payments.

2. Financial Strength: Weakening Balance Sheet
   The balance sheet shows a drastic decline in net assets and working capital year-on-year. Fixed assets are minimal (£686) and declining. Current liabilities increased from £12,665 in 2023 to £39,544 in 2024, driven mainly by trade creditors and VAT liabilities. Current assets decreased from £44,070 to £39,158, with cash dropping from £881 to £123. The company’s shareholders’ funds are marginal at £300, implying very thin equity and limited buffer to absorb losses. The company paid a substantial dividend (£18,779) in 2024 despite declining reserves, which further strained equity. This weak balance sheet limits the company’s financial resilience.

3. Cash Flow Assessment: Constrained Liquidity
   Cash balances are very low (£123), and the company has a negative working capital position, indicating potential liquidity constraints. Trade debtors remain high (£35,860), but the increased trade creditors (£23,880) and VAT (£7,173) suggest supplier payments may be deferred or accumulating. The director’s loan account has been significantly repaid but still stands at £3,511. The company’s ability to meet short-term obligations depends heavily on timely collection of receivables and potentially additional funding support from directors or shareholders. Cash flow forecasts and debtor aging should be reviewed regularly.

4. Monitoring Points:

• Monitor monthly cash flow, focusing on debtor collections and creditor payments
• Track working capital changes and any further erosion of shareholders’ funds
• Watch for any overdue tax or VAT payments that could trigger penalties or enforcement
• Review any further dividends or director loans that impact liquidity and equity
• Assess operational performance improvements or new contracts that can restore profitability and balance sheet strength