A.M. UK SECURITY LIMITED
Company number 07317203 · 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 Analysis: A.M. UK Security Limited
1. Credit Opinion: DECLINE
This company presents an unacceptable credit risk for standard commercial lending facilities. The balance sheet is severely undercapitalized with net assets of only £6,101, while the sole director has an outstanding loan to himself of £11,969 — nearly double the company's net worth. The director advance has grown consistently with zero repayments made in the periods reported, indicating systematic extraction of value from the business. The company's asset base has contracted from £40,611 (2021) to £25,653 (2025), and the business has operated with wafer-thin equity (sub-£1,000) for three consecutive years prior to 2025. There is insufficient balance sheet depth to support debt servicing obligations.
2. Financial Strength
Balance Sheet Summary (Year Ending 31 March 2025):
| Item | 2025 | 2024 | Movement |
|---|---|---|---|
| Fixed Assets | £3,832 | £4,138 | -£306 |
| Current Assets | £21,821 | £20,843 | +£978 |
| Prepayments | £2,102 | £582 | +£1,520 |
| Creditors (<1 year) | (£19,187) | (£17,666) | +£1,521 |
| Net Current Assets | £4,736 | £3,759 | +£977 |
| Long-term Creditors | (£833) | (£5,833) | -£5,000 |
| Accruals/Deferred Income | (£1,634) | (£1,576) | +£58 |
| Net Assets | £6,101 | £488 | +£5,613 |
Key Concerns:
- Undercapitalized: Share capital of only £100. The business is effectively funded by retained earnings and creditor balances, not shareholder investment.
- Director Loan Dominance: The £11,969 director advance outstanding exceeds total net assets by nearly 2x. This is an unsecured, on-demand loan with interest charged but no repayments made in either 2024 or 2025. The balance has grown from £9,693 (2023) → £11,571 (2024) → £11,969 (2025).
- Declining Asset Base: Total assets have fallen 37% from the 2021 peak of £40,611.
- Historical Instability: Net assets went negative in 2019 (-£2,766), demonstrating the business can easily become insolvent.
- Long-term Liability Reduction: The reduction in creditors due after one year from £5,833 to £833 may indicate a loan or HP agreement being paid down — positive in isolation but reducing the company's asset base.
Equity Trajectory:
| Year | Net Assets |
|---|---|
| 2016 | £9,993 |
| 2017 | £10,548 |
| 2018 | £962 |
| 2019 | -£2,766 |
| 2020 | £2,710 |
| 2021 | £3,320 |
| 2022 | £967 |
| 2023 | £426 |
| 2024 | £488 |
| 2025 | £6,101 |
The recovery to £6,101 in 2025 is encouraging but insufficient to offset the structural weaknesses. The business has spent most of the last 8 years with net assets below £3,500.
3. Cash Flow Assessment
Liquidity Position: - Current ratio (excl. prepayments): 21,821 / 19,187 = 1.14:1 - Including prepayments: 23,923 / 19,187 = 1.25:1
This is marginal. The company can barely cover short-term obligations from current assets.
Working Capital: £4,736 (2025: £3,759 in 2024)
Working capital has improved but remains thin for a trading business. Any delay in debtor receipts or unexpected cost could create a cash shortfall.
Cash Flow Concerns: - No P&L is filed (micro-entity exemption), so profitability cannot be directly assessed - The director loan advance of £398 in 2025 (down from £1,878 in 2024) suggests reduced cash extraction, but the cumulative balance continues to grow - Employee count dropped from 2 to 1, suggesting cost reduction measures - The increase in prepayments from £582 to £2,102 may indicate advance payments for supplies or contracts — could signal cash being committed ahead of revenue
Debt Service Capacity: Given net assets of £6,101 and working capital of £4,736, the company has negligible capacity to service additional debt. Any new borrowing would need to be serviced from cash flow that appears marginal at best.
4. Monitoring Points
If any credit exposure is contemplated (which I strongly advise against), the following would require ongoing monitoring:
| Metric | Current Position | Risk Threshold |
|---|---|---|
| Director Loan Balance | £11,969 | Any increase from current level |
| Net Current Assets | £4,736 | Below £3,000 |
| Current Ratio | 1.14:1 | Below 1.0:1 |
| Net Assets | £6,101 | Below £3,000 |
| Filing Compliance | Current | Any overdue filings |
| Employee Count | 1 | N/A — key person risk |
Additional Red Flags: - Director loan repayment discipline: Zero repayments made in two years — monitor for any further advances - Creditor concentration: If trade creditors represent a large proportion of current liabilities, supplier risk could crystallize quickly - Key person dependency: Single director/employee — business continuity risk is extreme - Micro-entity accounts: Limited disclosure prevents full assessment of trading performance — request full management accounts if engagement continues
Summary
A.M. UK Security Limited is a micro-sized security installation business with a chronically thin balance sheet, a director who has extracted nearly £12,000 via unrepaid advances (exceeding total net assets), and a history of marginal equity positions including a period of negative net worth. The 2025 improvement to £6,101 net assets is positive but insufficient to overcome the fundamental concerns around capital adequacy, director conduct, and limited debt service capacity. The company cannot be considered a suitable credit risk for standard commercial facilities.