ACCU LIMITED

1. Credit Opinion: APPROVE

ACCU LIMITED demonstrates a strong capacity to service debt obligations. The company has delivered sustained revenue growth, reaching £19.1m for the year ended 30 November 2025, with a reported pre-tax profit of £2.1m. Net assets have strengthened to £1.7m and cash reserves stand at £1.2m. Accounts are audited, filed on time, and the company is active with no insolvency proceedings. Recent director resignations and planned investment in the US market are noted risks, but current earnings and liquidity provide adequate headroom for a credit facility.

2. Financial Strength

• Balance sheet trend: Net assets have grown consistently from £0.07m in 2018 to £1.66m at 30 November 2025, driven by retained profits. Shareholders’ funds equal net assets, indicating a clean equity base without significant minority interests or intangible distortions.
• Asset base: Total assets of £5.56m include fixed assets supporting the warehouse and office relocation, plus current assets including cash of £1.20m.
• Liabilities and gearing: Total liabilities are £3.46m. The summary data does not provide a current/non-current split, so the proportion of short-term trade creditors versus longer-term debt cannot be confirmed. Equity represents roughly 30% of total assets, indicating moderate gearing.
• Accounting quality: Accounts are prepared under the medium-sized companies regime and are audited, which supports the reliability of reported figures.

3. Cash Flow Assessment

• Liquidity: Cash increased from £0.66m at 30 November 2024 to £1.20m at 30 November 2025. The cash balance provides a liquidity buffer against near-term obligations.
• Profitability and cash generation: The reported pre-tax profit of £2.1m on revenue of £19.1m indicates strong operating performance and potential cash generation.
• Working capital: Management reports increased investment in stock holding to support revenue growth. Consignment stock arrangements with suppliers are used to expand product availability without commensurate working capital outlay. This helps manage the cash conversion cycle but creates reliance on supplier terms.
• Debt service: A precise debt service coverage ratio cannot be calculated from the summary data because the debt repayment schedule and interest cost are not disclosed. However, profit levels relative to balance sheet liabilities suggest reasonable coverage capacity.

4. Monitoring Points

• Board and ownership stability: Several directors resigned during 2026, including individuals who are also persons with significant control. The corporate parent holds more than 75% of shares and voting rights. Future changes to the board or PSC register should be monitored for continuity of management.
• Export and trade risk: The company is expanding into the US market and cites uncertainty around international tariffs. Export growth is a key revenue driver, so trade policy changes could affect performance.
• Working capital intensity: Stock investment is rising to support sales. Monitor stock turnover, trade creditor payment behaviour, and whether consignment arrangements remain available.
• Domestic demand: The strategic report notes that a weak UK economy continues to limit manufacturing growth in the domestic market.
• Comparability: The accounting reference date changed from 31 March to 30 November during 2024. Period-on-period comparisons should be treated with caution until two full 12-month periods are available.