CHROME TELECOM LIMITED

Credit Opinion: CONDITIONAL

Chrome Telecom Limited is solvent, profitable in retained earnings terms, and holds a strong cash position. However, the filed accounts are filleted, so no profit and loss account is publicly available to verify turnover, margins, or debt-service cover. Total long-term borrowings are material relative to equity, including £240,000 of “other loans” that first appear in the 2025 accounts. I would condition any facility on receipt of recent management accounts (including a profit and loss account), confirmation of the terms and security for the £240,000 other loans, and evidence that cash generation comfortably covers interest and capital repayments. Depending on facility size, a debenture or personal guarantees may also be warranted.

Financial Strength

• Net assets were £483,636 at 30 June 2025, up from £476,323 in 2024 and £424,883 in 2023. Shareholders’ funds stand at £483,536.
• Tangible fixed assets of £656,265 are predominantly land and leasehold property, providing some tangible security coverage.
• Liquidity ratios are strong: current assets of £998,484 against current liabilities of £474,520 gives a current ratio of approximately 2.1:1. Cash of £777,498 alone covers current liabilities approximately 1.6 times.
• Gearing is moderate but rising: creditors due after more than one year increased to £684,549 from £533,952, driven by new “other loans” of £240,000. Long-term debt is roughly 1.4 times shareholders’ funds.
• Filing compliance is satisfactory: accounts and confirmation statements are not overdue. Accounts are prepared under the small companies regime and are audit-exempt, which limits external assurance.

Cash Flow Assessment

• Cash at bank increased sharply from £415,578 in 2024 to £777,498 in 2025.
• Net current assets improved from £325,748 to £523,964 over the same period.
• Trade debtors fell significantly from £179,597 to £58,379. This may reflect strong collections, but it could also signal reduced sales activity; the cause cannot be determined without a profit and loss account or debtor ageing.
• Current liabilities include taxation and social security of £126,950 and bank loans/overdrafts of £56,767.
• Total borrowings across current and long-term facilities are approximately £772,000, including finance lease obligations, bank loans, and the new £240,000 other loans.
• No cash flow statement is filed, so operating cash generation and actual debt-service capacity cannot be verified from public records.

Monitoring Points

• Obtain the full profit and loss account to assess turnover trends, gross margins, EBITDA, and interest cover.
• Review trade debtor ageing to establish whether the decline in debtors reflects improved collection or lower business activity.
• Clarify the terms, security, and repayment schedule for the £240,000 “other loans” and any related-party balances owed to group undertakings or participating interests.
• Monitor cash flow sufficiency to service total borrowings of approximately £772,000.
• Track continued timely filing of accounts and confirmation statements, and any change in ownership or control given the corporate parent holds more than 75% of shares and voting rights.