SPR HEATING LIMITED

Executive Summary

Spr Heating Limited demonstrates solid equity growth and compliance with filing obligations, supporting operational stability. However, the notable increase in long-term borrowing and declining cash reserves introduce medium-level solvency and liquidity risks that require further investigation. A detailed review of debt terms, cash flow dynamics, and debtor quality is recommended to fully assess financial resilience.

SPR HEATING LIMITED - Analysis Report

Company Number: 13526997

Analysis Date: 2025-07-29 16:08 UTC

1. Risk Rating: MEDIUM
   Spr Heating Limited shows a stable equity base and positive net assets with increasing fixed assets, but the recent significant increase in long-term debt (bank loans) raises some solvency and liquidity concerns that warrant monitoring.

2. Key Concerns:

• Increased Long-Term Debt: Bank loans rose sharply to £150,103 in 2024 from nil in 2023, representing a significant financial obligation that could pressure cash flows.
• Declining Cash Reserves: Cash decreased from £77,801 in 2023 to £60,882 in 2024 despite increased debt, which may indicate cash outflows related to asset purchases or operations.
• Trade Debtors Concentration and Delay: Trade debtors dropped notably from £74,792 to £45,371, but other debtors and amounts owed by associates increased, potentially signaling collection or related party risk.

3. Positive Indicators:

• Growing Net Assets and Equity: Net assets increased from £134,792 to £192,804, indicating value creation and retained earnings growth.
• Positive Net Current Assets: Despite increased current liabilities, net current assets remain healthy at £95,974, supporting short-term operational needs.
• No Overdue Filings: The company is compliant with its statutory filing deadlines, reflecting good governance in regulatory matters.

4. Due Diligence Notes:

• Investigate the terms, interest rates, and repayment schedule of the £150k bank loan to assess debt servicing capacity.
• Review cash flow statements and budgets to understand liquidity management and the impact of fixed asset acquisitions on working capital.
• Examine the quality and aging of trade and other debtors, including related party balances, to evaluate credit risk and potential impairment.
• Confirm operational performance trends, including turnover and profitability, as these were not disclosed but are critical for sustainability assessment.
• Verify director background and any related party transactions given sole control by Mr. Matthew Sprigge.