APS ELECTRICAL SERVICES LIMITED
Company number 06772329 · 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.
Risk Rating: MEDIUM
The company is solvent with positive net assets and no filing delinquencies, but its liquidity is precarious. A very low cash balance, combined with a large dividend withdrawal that exceeded retained earnings, raises immediate concern about short-term financial resilience.
Key Concerns
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Critical Liquidity Squeeze – Cash at bank stands at only £237 against current liabilities of £25,832. Even after including trade debtors (£28,078), net current assets are just £2,483. Any delay in debtor collections or an unexpected expense could trigger a cash crisis.
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Aggressive Dividend Extraction – A dividend of £28,050 was paid to the director in the 2025 year. This amount essentially matches the total net assets of the company and is more than the retained profit for the period. Such extraction weakens equity and depletes the cash needed for operational stability.
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High Reliance on Trade Debtors – Debtors represent 52% of total assets (£28,078 out of £53,879). While this may be normal for an electrical installation business (project-based, payment on completion), it exposes the company to collection risk and slow cash conversion, especially given the minimal cash buffer.
Positive Indicators
- Solvency Restored – After two years of negative net assets (2021–2022), the company has rebuilt equity to £28,047. Total liabilities are well covered by total assets.
- Compliance Record – All accounts and confirmation statements are up to date with no overdue filings. The company qualifies for small company exemptions and has no audit requirement.
- Longevity – Incorporated in 2008, the business has operated for over 16 years, suggesting a degree of market resilience.
Due Diligence Notes
- Request management accounts and cash flow forecasts to assess the ability to meet the £21,362 corporation tax liability and VAT of £3,162 in the near term.
- Obtain an aged debtor analysis to evaluate whether the £28,078 is concentrated with a few customers or subject to payment delays.
- Examine the director’s loan account and dividend policy. Confirm that dividends were properly declared and that future distributions will not further undermine working capital.
- Seek detailed profit and loss information (not filed) to understand revenue trends and profit margins; the company is clearly profitable (given the tax charge) but profitability relative to turnover is unknown.
- Review the bank overdraft facility (£1,053) to understand available headroom.