Risk Assessment: TRACE SURVEYS LIMITED

1. Risk Rating: MEDIUM

The company presents a fundamentally sound balance sheet with growing net assets and strong liquidity ratios. However, the most recent filing reveals a critical operational change—average employee count dropping from 12 to zero—which introduces significant uncertainty about whether this entity continues to operate as a going concern in its current form. This single factor elevates the risk rating from LOW to MEDIUM.

2. Key Concerns

a) Complete Workforce Elimination The average number of employees fell from 12 (FY2024) to NIL (FY2025). For an engineering and environmental consulting business, human capital is the primary revenue-generating asset. This suggests either: (i) the company has ceased active trading operations, (ii) all staff have been transferred to a related entity, or (iii) the business model has fundamentally changed. None of these scenarios are explained in the micro-entity accounts, which provide no directors' report or strategic commentary.

b) Significant Decline in Current Assets Current assets fell from £681,544 to £578,622—a reduction of £102,922 (15.1%). While current liabilities also decreased substantially (from £362,439 to £205,381), the drop in current assets alongside zero employees could indicate collection of trade debtors without replacement, or conversion of current assets to fixed assets. Without a profit & loss account or cash flow statement (permitted omissions under micro-entity rules), the drivers of this movement are opaque.

c) Increase in Long-Term Liabilities Creditors falling due after more than one year increased from £43,949 to £76,589—a 74.2% increase. This could represent reclassification of current liabilities, new borrowing, or obligations related to the apparent cessation of employment (e.g., deferred settlement of employment claims). The nature and terms of these liabilities are undisclosed.

3. Positive Indicators

a) Strong and Improving Net Asset Position Net assets have grown consistently over the available 10-year history, from £83,765 (2016) to £446,702 (2025). This represents compound annual growth of approximately 20% in shareholders' funds, indicating sustained profitability and retention of earnings within the business.

b) Healthy Liquidity Position Net current assets stand at £373,241, with a current ratio of approximately 2.8:1 (£578,622 / £205,381). The company appears well-positioned to meet its short-term obligations, even in a wind-down scenario.

c) Regulatory Compliance Accounts and confirmation statements are filed on time with no overdue items. The company has maintained an active status throughout its 15-year history. There are no disqualification records against the director.

d) Low Gearing With total liabilities of only £281,970 against total assets of £728,672, the company has a debt-to-assets ratio of approximately 38.7%. The business is not over-leveraged.

4. Due Diligence Notes