VULCAN AVIATION LIMITED

Executive Summary

Vulcan Aviation Limited displays significant financial distress with negative working capital and shareholders’ funds, reflecting solvency and liquidity risks. While the company maintains regulatory compliance and has shown some financial improvement, its reliance on intra-group funding and ongoing negative net assets present elevated risk to investors. Careful scrutiny of cash flows, group transactions, and management strategy is recommended to assess future viability.

VULCAN AVIATION LIMITED - Analysis Report

Company Number: 13135701

Analysis Date: 2025-07-29 20:43 UTC

1. Risk Rating: HIGH

Justification: Vulcan Aviation Limited exhibits significant solvency and liquidity concerns as evidenced by persistent net current liabilities, negative shareholders’ funds, and net liabilities position over recent years. The company’s financials show a gradual reduction in net liabilities but remain negative with a deficit in working capital. Such financial distress signals elevated risk regarding the company’s ability to meet short-term obligations and sustain operations without external support.

2. Key Concerns:

• Negative Net Current Assets: The company reported net current liabilities of £6,552 as at 31 December 2023, improving from £29,892 in 2022 but still negative, indicating potential liquidity constraints to cover short-term debts.
• Negative Shareholders’ Funds and Net Liabilities: Shareholders’ funds remain negative at £699 (2023) after a substantial deficit of £23,603 in 2022, indicating accumulated losses eroding equity capital and potential solvency risks.
• Reliance on Group Undertakings: Significant amounts owed to and from group undertakings (£52,420 credit balance and £29,642 debtor balance respectively) suggest intra-group financing dependence which may obscure true liquidity position and raise concerns over financial independence.

3. Positive Indicators:

• Filing Compliance: The company is up to date with statutory filings for both accounts and confirmation statements, indicating regulatory compliance and good governance in terms of reporting.
• Going Concern Assertion: Directors have explicitly adopted the going concern basis in preparing financial statements, implying management confidence in the company’s operational continuity.
• Gradual Financial Improvement: The decrease in net current liabilities and improvement in net liabilities from 2022 to 2023 could signal initial progress towards stabilising financial health.

4. Due Diligence Notes:

• Assess the nature and terms of intercompany balances to determine risks related to group dependency and potential funding issues.
• Investigate cash flow statements and future cash flow projections (not provided) to evaluate liquidity adequacy and operational cash generation capacity.
• Review management plans and any covenants or commitments related to operating leases and creditors to understand potential burden on cash resources.
• Examine underlying causes of historical losses and confirm whether operational restructuring or capital injections are planned or underway.
• Confirm no director disqualifications or governance irregularities beyond the data provided.