WATKINS PAYNE LIMITED

Executive Summary

Watkins Payne Limited is financially stable with robust net assets and positive liquidity, indicating a low risk of insolvency. The company maintains compliance with filing requirements and operates with consistent staffing. The main considerations relate to the large goodwill balance and sole control by a single director, which warrant further review but currently do not raise immediate concern.

WATKINS PAYNE LIMITED - Analysis Report

Company Number: 13527263

Analysis Date: 2025-07-29 17:26 UTC

1. Risk Rating: LOW
   Watkins Payne Limited demonstrates strong financial stability with substantial net assets and positive working capital. The company is up to date on filings, has no indications of distress, and its financial profile suggests low solvency and liquidity risk.

2. Key Concerns:

• Significant goodwill balance (£16.36M) subject to amortisation: Goodwill represents a large portion of fixed assets and is amortised over 20 years, which requires ongoing impairment testing to ensure valuation remains appropriate.
• Declining fixed assets value: Fixed assets decreased slightly from £17.43M to £16.59M year-over-year, which may warrant review to understand asset impairments or disposals.
• Concentration of control: The sole director and 100% owner is Mr. Andrew Thrower, which could pose governance or succession risks if not properly managed.

3. Positive Indicators:

• Strong net assets of £18.15M and shareholders’ funds, with positive net current assets (£2.13M) indicating good liquidity.
• Cash balance over £1M supports operational stability and liquidity.
• Consistent employee base (~46 employees) and no overdue filings or compliance issues reflect operational and regulatory stability.
• Turnover recognition and accounting policies appear sound and compliant with FRS 102 Small Entities standards.

4. Due Diligence Notes:

• Review goodwill impairment testing documentation and assumptions to verify that the intangible asset valuation is justified.
• Investigate the nature of other creditors, especially the long-term creditor balance (£574k) to understand any financial obligations or contingent liabilities.
• Assess the contract backlog and revenue recognition policies, given the industry classification in specialised construction activities which can have project-specific risks.
• Confirm governance controls given the single director/shareholder structure and ensure appropriate oversight mechanisms are in place.
• Validate that the company’s working capital and cash flow projections are robust to support ongoing operations and investments.