Company Number: 14051703

Analysis Date: 2025-07-29 18:47 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   TAGGSTAR TECHNOLOGIES LIMITED, a private limited company active since 2022, operates in business and domestic software development (SIC 62012). The company shows a solid net asset base (£3.05m as of 2024 year-end) largely underpinned by intangible assets (goodwill) and tangible fixed assets. However, the company reports net current liabilities of £299k at 2024 year-end, indicating a working capital deficit. The cash position has decreased significantly from £1.01m in 2023 to £392k in 2024, which may constrain liquidity. Despite the lack of audit and no profit and loss statement provided, the directors affirm going concern status. The company’s ability to service short-term obligations depends on improving working capital and cash flow. Credit approval should be conditional on regular monitoring of liquidity and receivables collection, and possible support from the parent entities (Dmt Taggstar Holdings Limited and Dmt Taggstar Holdings 2 Limited), which hold controlling interests.

2. Financial Strength:

• Net assets of £3.05m are strong for a company incorporated in 2022, reflecting substantial intangible assets (goodwill of £3.32m after amortisation of £564k).
• Tangible assets stand at £42.5k, showing some investment in plant and equipment.
• However, net current liabilities of £299k indicate short-term liquidity stress, worsened from a near breakeven working capital in 2023.
• Shareholders’ funds decreased from £3.88m in 2023 to £3.32m in 2024, largely due to amortisation expenses and profit and loss reserves moving more negative (from -£151k to -£267k).
• The company’s financial structure is asset-heavy on intangibles, which may limit collateral value for lending.
• No external borrowings are disclosed, but £112k owed to related parties is noted.

3. Cash Flow Assessment:

• Cash reserves dropped by over 60% year on year, from £1.01m to £392k, raising concerns about short-term cash sufficiency.
• Debtors remain elevated (£1.34m), slightly down from 2023, but trade debtors decreased by approximately £300k, indicating some collection improvement.
• Current liabilities remain high at £2.03m, with a significant portion classified as “other creditors” (£1.44m), which could include accrued expenses or deferred payments.
• The negative net current assets position means reliance on creditor terms or parent company support may be necessary.
• The company’s financials show no bank overdraft or external loans, indicating limited external debt but also no significant liquidity buffer.

4. Monitoring Points:

• Working capital and cash flow trends: monitor monthly liquidity and cash conversion cycle closely to ensure the company can meet short-term obligations without default.
• Receivables ageing: track collection efficiency and concentration risk within trade debtors.
• Goodwill impairment: given the large intangible asset base, monitor any impairment triggers that could affect net asset value.
• Related party balances: watch for any increase in amounts owed to related parties which may indicate funding pressures.
• Profitability and reserves movement: when available, review P&L accounts to assess operating performance and cash generation capability.
• Directors’ compliance with filing and governance obligations, given the company’s relatively recent incorporation and growth phase.