AIKMO TRADING LIMITED
Company number 04779531 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Credit Assessment: AIKMO TRADING LIMITED
1. Credit Opinion: CONDITIONAL (with strong caveats)
Verdict: This application requires significant conditions. The company is technically insolvent with negative net assets of £178,880 and accumulated losses of £583,880. It survives only through stated parent company support and related-party lending of £1.35M. While recent trajectory shows improvement and the current ratio is healthy, the fundamental insolvency and dependency on group support present material credit risk.
Conditions for approval: Parent company guarantee from Aikmo Group Limited, appropriate security/covenants, and enhanced monitoring. Unsecured credit should be declined.
2. Financial Strength: WEAK
Balance Sheet Position:
| Metric | 2025 | 2024 | Movement |
|---|---|---|---|
| Net Assets | (£178,880) | (£249,151) | +£70,271 |
| Shareholders' Funds | (£583,880) | (£654,151) | +£70,271 |
| Total Assets | £1,356,604 | £1,301,184 | +£55,420 |
| Total Liabilities | (£1,372,661) | (£1,479,188) | -£106,527 |
The company has been insolvent since FY2021. The improvement in FY2025 is encouraging—net liabilities reduced by approximately 28%—but the balance sheet remains deeply underwater. Shareholders' funds show accumulated losses of nearly £584K against called-up share capital of just £405K.
Critical Dependency: The going concern note explicitly states the company is "loss making" with "net liabilities" and continues only through "full support from their parent company." This is a significant red flag. Withdrawal of group support would likely trigger insolvency.
Related Party Exposure: Long-term creditors of £1,372,661 comprise: - Amounts owed to related parties: £1,351,171 - Amounts owed to group undertakings: £21,490
The business is effectively funded by group/related party loans rather than commercial debt or retained earnings. This related-party debt represents 98.5% of long-term creditors and 81% of total liabilities.
Asset Quality: Fixed assets of £509,362 include freehold property at £164,387 (net book value), providing some tangible backing. However, stock of £580,041 represents 68% of current assets—significant inventory concentration for an electrical appliance retailer carrying obsolescence risk.
3. Cash Flow Assessment: ADEQUATE (current), VULNERABLE (structural)
Liquidity Position:
| Metric | 2025 | 2024 |
|---|---|---|
| Current Assets | £847,242 | £764,297 |
| Current Liabilities | £162,823 | £71,147 |
| Net Current Assets | £684,419 | £693,150 |
| Current Ratio | 5.2x | 10.7x |
The current ratio appears strong at 5.2x, but this requires context. Current liabilities are low because the majority of debt sits in long-term related-party loans. Trade creditors of just £40,246 suggest either prompt payment or limited trade credit usage.
Cash: £158,562 (up from £98,070)—a positive trend. However, this follows a pattern of volatility (£66,869 in 2022, £184,083 in 2023).
Working Capital Concerns: - Stock turnover and days sales outstanding cannot be calculated from filleted accounts (no P&L filed under s.444 exemption) - Debtors of £108,639 include £53,500 in "other debtors"—nature unclear - The 16% reduction in employees (30 to 26) may indicate cost restructuring
Debt Service: No bank loans in long-term creditors (prior year: £9,372). Short-term bank borrowings of only £8,240. The company is not commercially leveraged, but this reflects an inability to obtain commercial debt rather than conservative capital management.
4. Monitoring Points
Immediate Concerns: - Parent company financial health: Verify Aikmo Group Limited's ability to continue supporting this entity. Request group accounts. - Related party loan terms: £1.35M in related-party debt—understand repayment expectations, subordination status, and whether these are callable on demand - Profitability: Company is loss-making per its own disclosure. Obtain management accounts to assess trading performance and margin trends
Ongoing Monitoring: - Stock obsolescence: £580K in finished goods for an electrical appliance retailer—monitor stock aging and provision adequacy - Cash flow volatility: Track monthly cash positions; the historical pattern shows significant swings - Employee headcount: Further reductions may signal deteriorating trade - Trade creditor days: Currently low at £40K—any increase could indicate supplier concern - Filing compliance: Accounts and confirmation statements are current—maintain this watch - Sector risk: Electrical appliance retail faces margin pressure from online competition and consumer spending sensitivity
Covenant Suggestions (if facility approved): - Minimum net current assets threshold - Parent guarantee with financial covenant compliance from Aikmo Group Limited - Negative pledge on asset disposals without consent - Regular management account submission (quarterly minimum)