ALLIED PROTEK ENGINEERING SOLUTIONS LIMITED

1. Credit Opinion: CONDITIONAL

Allied Protek Engineering Solutions Limited is a credible borrower on the surface. Revenue has grown from £14.29m (2023) to £39.22m (2025), net assets have strengthened to £4.60m, and cash has increased to £2.45m. The company is filing on time and no adverse director conduct appears in the data provided.

I would still treat any facility as CONDITIONAL rather than an unqualified approval because:

• Total liabilities are high relative to equity: £15.03m liabilities against £4.60m net assets.
• The available data does not include a split between current and non-current liabilities, so short-term repayment pressure cannot be fully assessed.
• The rapid growth from £14.29m to £39.22m turnover in two years introduces execution risk.
• The ownership structure sits within Poluma Group Limited, with Xxxxxx Xxxxxxxxname shown to subscribers also noted as a PSC. Group support is positive, but the ultimate ownership chain and intra-group exposures need verification.

Approval should be subject to satisfactory security, covenant headroom, and review of management accounts, including EBITDA, debt service cover, and working capital.

2. Financial Strength

The balance sheet is clearly strengthening.

Net assets have increased every reported year since 2016, and the 2025 retained surplus grew by approximately £1.71m in the year. That points to genuine profitability rather than accounting adjustments alone.

Equity represents roughly 22% of total assets. That is reasonable for a capital-intensive engineering business, but it is not a high buffer. The company is leveraged at around 3.3x total liabilities to net assets. Some of those liabilities will be trade creditors, accruals, and intercompany balances, but external borrowing is likely material. The full accounts should confirm the debt structure, finance leases, and any group guarantees.

3. Cash Flow Assessment

The cash position is a positive signal. Cash rose from £1.92m to £2.45m despite continued revenue growth, which suggests the business is converting profit into cash rather than tying everything up in working capital.

However, this is a bespoke design-and-build engineering company. Those contracts typically involve:

• High levels of work-in-progress and debtor balances.
• Stage payments and retentions.
• Potential for cost overruns on fixed-price contracts.

Without an extracted cash flow statement, I cannot calculate operating cash flow, interest cover, or free cash flow. The credit decision should therefore be supported by:

• Management-prepared cash flow forecasts.
• A review of debtor days and WIP levels.
• Confirmation of the repayment schedule on existing debt and finance leases.

The cash balance alone is not enough to confirm debt service capacity; the quality and timing of future contract cash flows matter more.

4. Monitoring Points

If a facility is granted, the following should be monitored regularly:

• Working capital position: current ratio, net current assets, debtor days, and WIP levels.
• Leverage: total liabilities to net assets, plus any net debt to EBITDA calculation once management figures are available.
• Profitability and interest cover: EBITDA, operating margin, and interest cover from management accounts.
• Contract concentration: reliance on a small number of large orders; top customers and contract pipeline.
• Group and intercompany exposure: balances with Poluma Group Limited and subsidiaries; confirm the company is not effectively funding other group entities on weak terms.
• Fixed asset investment: capital expenditure versus depreciation, and whether the business is maintaining its asset base.
• Compliance: continued on-time filing of accounts and confirmation statements.
• Sector risks: steel prices, construction demand, and margin pressure in manufacturing.

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