ZEPLIN INTERNATIONAL LTD

Executive Summary

Zeplin International Ltd demonstrates solid financial health with increasing profitability and equity, supported by a positive net asset position and timely regulatory compliance. However, investor caution is warranted due to reliance on parent company support and a notable decrease in cash reserves. Close monitoring of liquidity and creditor settlement is recommended to ensure ongoing operational stability.

ZEPLIN INTERNATIONAL LTD - Analysis Report

Company Number: 13159563

Analysis Date: 2025-07-29 14:06 UTC

1. Risk Rating: LOW
   The company's financial statements show a solid net asset position of £531,388 as of 31 December 2023, with net current assets comfortably positive at £531,388. There are no overdue filings, and the company remains active with no indication of distress. The reliance on the parent company for financial support is noted but well documented with confirmation of support for at least 12 months, mitigating immediate solvency concerns.

2. Key Concerns:

• Reliance on Parent Company Support: The going concern statement explicitly states dependency on Zeplin, Inc. for financial backing. Should this support cease, the company’s ability to meet obligations may be at risk.
• High Corporation Tax and Social Security Creditors: Creditor balances related to corporation tax (£74,131) and social security (£34,168) are significant and require monitoring to ensure timely settlement.
• Decline in Cash Balances: Bank and cash balances decreased from £429,320 in 2022 to £184,182 in 2023, which could indicate cash flow management challenges or increased operational expenditure.

3. Positive Indicators:

• Improved Profitability: The profit for the year increased markedly to £160,548 in 2023 from £6,173 in 2022, indicating improved operational performance.
• Increasing Equity Base: Total equity grew from £298,441 in 2022 to £531,388 in 2023, supported by share-based payments and retained earnings, reflecting financial strengthening.
• Timely and Compliant Filings: Both accounts and confirmation statements are filed on time without any overdue status, indicating good regulatory compliance.

4. Due Diligence Notes:

• Review the nature and terms of the intercompany service agreement with Zeplin, Inc., including the scope and sustainability of financial support.
• Examine cash flow forecasts and liquidity management practices to assess the cause of the decline in cash balances despite profitability.
• Verify the timing and settlement plans for tax and social security liabilities to avoid potential non-compliance or penalties.
• Confirm no director disqualifications or governance issues, noting the current director and corporate secretary appointments appear standard.