STACEY OIL SERVICES LIMITED
Company number SC057684 · 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 Assessment: Stacey Oil Services Limited
1. Credit Opinion: CONDITIONAL
Reasoning: The company demonstrates substantial asset backing and significantly improved liquidity, but the apparent loss in the latest period and declining turnover indicators warrant further investigation before full commitment. The business is asset-rich with strong cash generation but shows signs of potentially contracting activity levels.
2. Financial Strength
Balance Sheet Summary (Year Ending 31 March 2025):
| Metric | 2025 | 2024 | Movement |
|---|---|---|---|
| Total Assets | £2,065,457 | £2,133,919 | (£68,462) |
| Net Assets | £1,139,249 | £1,200,647 | (£61,398) |
| Shareholders' Funds | £1,139,149 | £1,200,547 | (£61,398) |
Key Observations:
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Asset Composition: Heavily weighted toward fixed assets (£1,335,648), predominantly freehold property (£1,141,645 NBV). This provides significant collateral but also indicates an illiquid asset base.
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Deteriorating Net Assets: The £61,398 decline in shareholders' funds indicates a loss for the year (no dividend declared that would explain the reduction). This follows a period of steady growth from £666,885 (2020) to £1,200,647 (2024).
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Gearing: Total liabilities of approximately £926,208 against net assets of £1,139,249 yields a debt-to-equity ratio of approximately 0.81:1 – moderate and manageable.
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Long-term Debt: £679,000 in creditors due after more than one year (slightly reduced from £726,749). The nature of this debt isn't fully clear from filleted accounts but represents the primary leverage concern.
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Tangible Net Worth: Strong at over £1.1M, providing substantial buffer.
3. Cash Flow Assessment
Liquidity Position – Dramatically Improved:
| Metric | 2025 | 2024 | 2023 | 2022 |
|---|---|---|---|---|
| Cash | £496,022 | £140,955 | £76,445 | £4,718 |
| Current Ratio | 3.13x | 4.22x | - | - |
| Quick Ratio | 2.87x | 3.99x | - | - |
Working Capital Analysis:
| Component | 2025 | 2024 | Movement |
|---|---|---|---|
| Stocks | £61,020 | £444,165 | (£383,145) |
| Trade Debtors | £167,144 | £214,751 | (£47,607) |
| Trade Creditors | £161,965 | £121,342 | £40,623 |
| Net Current Assets | £496,455 | £617,929 | (£121,474) |
Interpretation:
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Cash Transformation: The cash position has improved by £355,067 year-on-year, despite an apparent trading loss. This cash release has come predominantly from working capital compression – inventory reduction of £383,145 and improved creditor terms.
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Stock Reduction Concern: The 86% reduction in finished goods (from £444,165 to £61,020) is significant. While this has released cash, it may indicate:
- Deliberate de-stocking / business contraction
- Potential loss of contracts or reduced demand
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Inventory write-downs not separately disclosed
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Bank Debt: Only £62,570 in current bank loans/overdrafts – modest and well within capacity.
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Cash Generation Quality: The cash improvement stems from working capital release rather than operating profits, which is less sustainable going forward.
4. Monitoring Points
Immediate Concerns:
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Profitability Trend: The P&L reserve decline indicates a loss of approximately £61,398. Request management accounts to understand the trading performance and whether this is a one-off or structural decline.
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Stock Reduction Rationale: Clarify whether the significant inventory reduction is strategic (working capital optimisation) or symptomatic of declining business volumes.
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Long-term Creditor Composition: £679,000 in long-term creditors requires understanding – is this finance leases, bank term debt, or related-party loans? The accounts reference finance lease obligations of £4,287 in current liabilities, suggesting the majority may be other obligations.
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Revenue Visibility: No turnover figure available (filleted accounts). Request turnover and margin data to assess debt service coverage properly.
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SIC Code Discrepancy: Registered SIC is 94120 (Professional membership organisations) but the company name and asset base suggest oil services operations. Clarify actual business activity.
Ongoing Monitoring:
- Cash Position: Monitor whether the improved cash is maintained or drawn down
- Trade Creditor Days: Increasing from £121k to £162k may indicate stretched payment terms
- Related Party Transactions: Marshall family controls 50-75% between two PSCs – assess any intercompany exposures
- Sector Risk: Aberdeen-based oil services business exposed to energy sector cyclicality
- Filing Compliance: Currently good – accounts and confirmation statement up to date
Suggested Conditions:
- Obtain and review last 3 months' management accounts
- Request turnover and profit figures to calculate interest coverage
- Clarify nature and terms of long-term debt
- Seek explanation for stock reduction and current trading outlook