THE SKILLS NETWORK (TSN) GROUP LIMITED

Executive Summary

The Skills Network (TSN) Group Limited demonstrates a strong recovery trajectory with improving profitability, revenue growth, and sound governance. While its low asset base and sector funding dependencies warrant attention, the company’s active risk management and strategic initiatives provide a solid foundation for operational stability. Continued monitoring of liquidity and policy risks is recommended to ensure sustained financial health.

THE SKILLS NETWORK (TSN) GROUP LIMITED - Analysis Report

Company Number: 14006392

Analysis Date: 2025-07-29 20:51 UTC

1. Risk Rating: LOW
   The Skills Network (TSN) Group Limited shows positive financial turnaround with growing turnover, improved profitability, and no overdue filings. The company is actively managing risks and has clear strategic plans, supporting a low risk profile at this stage.

2. Key Concerns:

• Limited tangible fixed assets and minimal net asset base (£85) suggest low asset backing, which may constrain borrowing capability or buffer against adverse events.
• Reliance on government and education sector funding exposes the company to policy changes and funding risks, which could impact revenue stability.
• Significant reduction in administration expenses and headcount restructuring, while improving profitability, may carry operational risk if poorly executed or if cost cuts affect service delivery.

3. Positive Indicators:

• Substantial revenue growth of 13% year-on-year to £22.6m with a stable gross profit margin of 83.5%.
• Turnaround from a loss before tax (£1.9m in 2023) to a profit before tax (£0.96m in 2024), indicating effective financial and operational restructuring.
• No overdue statutory filings and a clean audit opinion with no going concern qualifications, reflecting good governance and compliance.
• Diversified revenue streams including direct ESFA contracts, subcontracts, and technology sales, reducing concentration risk.
• Active risk management processes with regular board and management review of risks and cash flow forecasting.

4. Due Diligence Notes:

• Review detailed cash flow statements to assess liquidity beyond static net asset figures, ensuring operational cash sufficiency.
• Examine the impact and sustainability of cost reductions on service quality and delivery capacity, especially given sector reliance.
• Assess contract renewal terms and dependencies on government funding to understand exposure to policy changes.
• Investigate the ownership structure and any intercompany guarantees or obligations that may affect group solvency.
• Confirm robustness of credit control and debtor management given exposure to various customer types.
• Monitor ongoing strategic execution and performance against the three-year recovery and growth plan.