Company Number: 13168167

Analysis Date: 2025-07-20 11:01 UTC

1. Risk Rating: MEDIUM
   The company's financial position shows moderate net assets, positive working capital, and current liabilities that are covered by current assets, indicating some solvency. However, the significant reduction in current assets and net assets compared to prior years, alongside elevated finance lease obligations, raise concerns. The absence of turnover or profitability data, and reliance on director loans previously repaid, also warrant caution.

2. Key Concerns:

• Liquidity Pressure: Current assets decreased by approximately £465k from the prior year, primarily due to a reduction in debtors (£695k in 2024 vs £1.25m in 2023) and cash balances, although net current assets remain positive at £66.7k. This decline could strain short-term liquidity.
• Increased Financial Leverage: Obligations under finance leases and hire purchase contracts nearly doubled from £50k in 2023 to £89k in 2024, increasing fixed financial commitments that may impact cash flow flexibility.
• Declining Net Assets: Net assets dropped from £131k to £98k year-on-year, reflecting either losses or asset impairments, which could indicate operational challenges.

3. Positive Indicators:

• Positive Net Current Assets: Despite the decline, net current assets remain positive, suggesting the company can meet short-term liabilities.
• No Overdue Filings: The company is compliant with filing deadlines for accounts and confirmation statements, indicating good regulatory adherence.
• Stable Employee Base: The number of employees remained steady at 17, suggesting operational continuity.
• Director Involvement and Control: Directors with direct shareholding and control indicate engaged management with aligned interests.

4. Due Diligence Notes:

• Review detailed profit and loss accounts to assess operational profitability and cash flow trends, which are not included in the current summary.
• Investigate the reasons behind the substantial reduction in debtors and current assets between 2023 and 2024 to assess whether this reflects lower sales, improved collections, or write-offs.
• Examine the terms and conditions of the finance lease and hire purchase contracts to understand repayment obligations and potential refinancing risks.
• Confirm the nature and recoverability of debtors and any related party transactions, including director loans, for potential credit risk.
• Assess the company’s business model sustainability within the employment placement agency sector, including client concentration and market competition.