UNDER THE DOORMAT MANAGED LTD

Executive Summary

Under The Doormat Managed Ltd is financially fragile with substantial net liabilities and a large working capital deficit driven by reliance on intercompany loans. The company is loss-making and depends heavily on related party financing, limiting its capacity to service external debt. Credit approval is not recommended until profitability and independent cash flow improve.

UNDER THE DOORMAT MANAGED LTD - Analysis Report

Company Number: 13623627

Analysis Date: 2025-07-20 18:28 UTC

1. Credit Opinion: DECLINE
   Under The Doormat Managed Ltd demonstrates significant financial distress with net liabilities worsening to -£446k as of 31 March 2023, from -£177k the prior year. Despite current assets growing mainly through intercompany balances and cash, the company relies heavily on amounts owed to group undertakings (£540k) to finance operations, indicating limited independent cash generation. The absence of profitability (loss of £269k in the year) and increasing creditor balances reflect weak business resilience and questionable ability to service external debt. The company is still relatively young and expanding its employee base, but without a clear path to profitability or external funding beyond group loans, the credit risk is elevated.

2. Financial Strength:
   The balance sheet is weak with tangible fixed assets minimal (£771) and net liabilities showing substantial erosion of equity. Current liabilities (£759k) far exceed current assets (£312k), resulting in a large working capital deficit (-£447k). The high level of amounts owed to group undertakings suggests financing is internally sourced rather than sustainable external credit. Share capital is nominal (£100), evidencing limited equity buffer. Overall, the financial structure is fragile with negative net assets and increasing creditor reliance.

3. Cash Flow Assessment:
   Cash at bank improved to £84.9k, which is positive, but this is largely supported by intercompany loans (£202k owed by group undertakings). Trade debtors are modest (£18k) but insufficient to cover trade creditors (£19k) and other liabilities. The company’s cash flow depends on favourable credit terms from related parties rather than operational cash generation. No audit is performed, and no detailed income statement data is provided, but given reported losses and growing liabilities, liquidity risk is significant if group support ceased.

4. Monitoring Points:

• Profitability trends and reduction in losses
• Changes in intercompany balances, both receivables and payables
• Ability to convert debtors to cash promptly
• Management of working capital and creditor payment terms
• Progress toward positive net assets and equity build-up
• Any external funding or investment inflows to reduce reliance on related party loans

Summary:
Under The Doormat Managed Ltd is in its early growth phase but currently shows weak financial health with significant net liabilities and dependency on group loans for liquidity. The company’s ability to meet external credit obligations independently is limited, and losses indicate ongoing operational challenges. Caution is advised before extending credit without clear improvement in profitability and balance sheet strength.