SPA COLOUR LIMITED
Company number 06327621 · 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: SPA COLOUR LIMITED
1. Credit Opinion: DECLINE
Reasoning: This company presents an unacceptable credit risk profile. SPA Colour Limited has been technically insolvent for at least nine consecutive years, with accumulated losses growing from £4,357 (2017) to £38,489 (2025). The balance sheet deficit has nearly tripled in just two years (from £18,755 in 2023 to £38,489 in 2025). Critically, the company has negative working capital of £15,917 and a current ratio of just 0.33:1, meaning it cannot meet its short-term obligations from current assets. The company is trading while insolvent, which raises concerns about the director's fiduciary duties under the Insolvency Act 1986. There is no collateral available to secure a facility and no evidence of an external capital injection or restructuring plan to address the deteriorating position.
2. Financial Strength
Balance Sheet Health: Severely Weak
| Metric | 2025 | 2024 | 2023 |
|---|---|---|---|
| Net Assets | (£38,489) | (£35,458) | (£18,755) |
| Shareholders' Funds | (£38,489) | (£35,458) | (£18,755) |
| P&L Reserve | (£38,490) | (£35,459) | N/A |
| Share Capital | £1 | £1 | £1 |
The company is deeply insolvent. Net liabilities have more than doubled from £18,755 to £38,489 over two years. The £1 share capital provides no cushion whatsoever. Tangible fixed assets stand at £nil (fully depreciated), meaning there is no asset base available as security. The entire asset base consists of just £7,728 in current assets (debtors and cash) against £46,217 in total liabilities.
Liability Structure: - Current liabilities: £23,645 (due within one year) - Long-term liabilities: £22,572 (due after one year) - Total liabilities: £46,217
The company has minimal equity buffer and is entirely dependent on creditor forbearance for continued operation.
3. Cash Flow Assessment
Liquidity Position: Critically Inadequate
| Metric | 2025 | 2024 | 2023 | 2019 |
|---|---|---|---|---|
| Cash | £3,897 | £3,454 | £1,892 | £21,971 |
| Net Current Assets | (£15,917) | (£10,667) | N/A | N/A |
| Current Ratio | 0.33:1 | 0.41:1 | N/A | N/A |
Cash reserves have declined 82% from £21,971 in 2019 to £3,897 in 2025. While there was a marginal improvement in cash from 2024 to 2025, this is against a backdrop of sharply deteriorating working capital. Net current liabilities have worsened from £10,667 to £15,917 in one year — a 49% deterioration.
The company cannot cover its short-term debts from current assets. With only 33p of current assets for every £1 of current liabilities, there is a material risk of creditor claims forcing cessation of trading. The absence of turnover data (abridged accounts) prevents a full cash flow analysis, but the trajectory of declining cash and expanding liabilities is deeply concerning.
Working Capital Deficit: £15,917 — the company requires this amount of additional working capital simply to achieve a break-even current ratio.
4. Monitoring Points
Should any existing exposure exist, the following metrics require close surveillance:
- Trade Creditor Days: Monitor whether the company is stretching supplier payments to manage cash flow — likely given the working capital deficit
- Cash Position: Any further decline below £3,000 would leave the company unable to meet routine obligations
- Long-term Liability Reduction: Track whether the £22,572 in long-term liabilities is being serviced or growing — accounts show a reduction from £24,907 but this may reflect reclassification to current rather than repayment
- Director Loan Account: Assess whether the director has lent funds to the company (supporting viability) or is drawing funds (exacerbating insolvency)
- Filing Compliance: Currently up to date, but any delay in filing could signal financial distress
- CCJ/Legal Actions: Monitor for creditor enforcement actions, which would be a precursor to formal insolvency proceedings
- Related Party Transactions: With a single director controlling 75%+ of shares, assess for potential preferential treatment of connected parties
Additional Risk Factors: - Key Person Dependency: Single director/employee with absolute control — any incapacity would halt operations - Sector Risk: Promotional merchandise is discretionary spend, highly vulnerable to economic downturns and marketing budget cuts - Trading While Insolvent: Director faces personal liability risk under s214 Insolvency Act 1986 if continuing to trade without reasonable prospect of paying creditors - Micro Entity Status: Minimal disclosure requirements limit visibility into true financial position — no P&L, no turnover, no detailed creditor analysis