Company Number: 12868297

Analysis Date: 2025-07-20 17:47 UTC

1. Risk Rating: MEDIUM

Justification: The company shows positive net assets and a recent increase in intangible fixed assets, suggesting investment in growth and some equity buffer. However, the net current liabilities position in 2023, a sharp increase in current liabilities, and significant trade debtors raise concerns about short-term liquidity and cash flow management.

2. Key Concerns:

• Liquidity strain evidenced by net current liabilities of £173k at 31/12/2023 compared to net current assets of £820k the previous year, primarily due to a large increase in current liabilities (£2.54m in 2023 vs £0.96m in 2022).
• High trade debtor balance (£2.05m) relative to cash (£128k) may indicate potential collection delays or credit risk concentration.
• Significant intangible asset addition (£1.25m) in 2023 concentrated in software/licenses, which could pose impairment risk if not matched by revenue growth or cash generation.

3. Positive Indicators:

• Net assets grew from £851k in 2022 to £1.01m in 2023, indicating increasing equity and potential retained earnings.
• No overdue filings or compliance issues noted; accounts and confirmation statements are up to date.
• Company remains active since incorporation in 2020 with stable director appointments and operating in a defined wholesale industry niche (machine tools).

4. Due Diligence Notes:

• Investigate the nature and recoverability of the trade debtors to assess credit risk and cash flow timing.
• Review the business plan and revenue trends supporting the large increase in intangible assets to confirm if capitalised software costs are justified.
• Assess the composition and maturity profile of current liabilities to understand liquidity pressures and any refinancing requirements.
• Confirm absence of director conduct issues or related party conflicts beyond disclosed transactions.