Company Number: 15022891

Analysis Date: 2025-07-29 13:31 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Tier 1 Facilities Management Ltd is a newly incorporated private limited company (incorporated July 2023) operating in combined facilities support activities. The latest accounts (to July 2024) show a very modest net asset base (£32) and negative net current assets (-£36,935), indicating working capital stress. The company’s current liabilities (£89,525) exceed its current assets (£52,590), mainly due to loans (£74,790). While this is typical for a startup in its first year, it signals liquidity risk. Credit approval should be conditional on ongoing financial support from the parent company (Tier 1 Holdings Ltd) and close monitoring of cash flow and liability management. The parent’s control and related party transactions provide some comfort but underline the need for oversight.

2. Financial Strength:
   The balance sheet reveals limited tangible fixed assets (£45,446) and a small cash balance (£5,670). Trade debtors are £37,696, but total current assets remain insufficient to cover current liabilities. Deferred taxation of £8,479 is also recognized, further eroding net assets. Shareholders’ funds are negligible at £32. The company relies on external loans and related party funding, indicating early-stage capitalization rather than self-sustaining financial strength. Absence of significant retained earnings or reserves limits the company’s ability to absorb operational shocks.

3. Cash Flow Assessment:
   Cash at bank is low relative to current liabilities, suggesting tight liquidity. Negative net current assets imply daily operations and short-term obligations may strain resources unless replenished by parent company funding or improved receivables collection. Trade creditors are modest (£8,862), but other loans and tax liabilities must be managed carefully. The company paid dividends to directors (£40,800) despite low equity, which raises concerns about cash prioritization. Close attention to cash conversion cycles and timely payments is critical for credit risk mitigation.

4. Monitoring Points:

• Monitor quarterly cash flow statements to ensure liquidity improves and working capital turns positive.
• Track related party transactions and parent company support levels to confirm ongoing financial backing.
• Review debtor aging and collection performance to prevent cash flow bottlenecks.
• Watch for any increase in trade or other creditors that might signal payment delays.
• Observe director dividend payments in relation to cash availability and profitability trends.
• Ensure timely filing of future accounts and confirmation statements to maintain transparency.