CIMAR (UK) LIMITED

Investment Risk Analysis: CIMAR (UK) LIMITED

1. Risk Rating: LOW to MEDIUM

Justification: The company has a strong cash position (£1.74M), positive net assets (£1.40M), and returned to profitability in 2024. Solvency and liquidity are not immediate concerns. However, rapid asset growth, a significant increase in trade debtors and accruals, and recent board changes introduce uncertainty that prevents a purely LOW rating.

2. Key Concerns

1. Surge in Trade Debtors and Collection Risk Trade debtors jumped from £124,747 (2023) to £789,248 (2024)—a 533% increase. While this may reflect revenue growth, it could also indicate deteriorating payment terms, aggressive revenue recognition, or collection difficulties. Without an aged debtor breakdown, this concentration risk needs verification.

2. Large Increase in Accruals Accruals rose from £105,500 to £482,919 (358% increase). This line item is opaque and could represent unpaid expenses, deferred bonuses, or contractual liabilities. A sudden jump of this magnitude without corresponding explanation in the accounts narrative raises questions about profit quality and near-term cash obligations.

3. Director Resignations Post Year-End Two directors (Xxxxxx Xxxxxxxxname shown to subscribers, Chairman, and Xxxxxx Xxxxxxxxname shown to subscribers) resigned on 10 November 2025, shortly after the latest financial statements were approved. With the new board composition (including two American directors and a corporate secretary), there may be strategic shifts, possible restructuring, or governance changes. This merits inquiry into succession plans and strategic direction.

3. Positive Indicators

• Strong Cash Position: Cash at bank of £1.74M covers current liabilities of £1.18M by a factor of 1.48x. Net current assets of £1.39M indicate healthy working capital.
• Return to Profitability: Accumulated losses reduced from £926,720 to £308,260, implying a profit of ~£618,000 for 2024. The company has reversed several years of losses.
• Parent Company Support: Ownership by Radnet, Inc. (>75% share and voting rights) provides a credible financial backstop and potential strategic synergies in medical imaging.
• Deferred Income of £375k: This represents cash received in advance for future services, a positive indicator of recurring revenue and customer commitment.
• Filing Compliance: All statutory filings are current and not overdue, demonstrating administrative discipline.

4. Due Diligence Notes

• Trade Debtor Aging: Request a detailed aged debtor report to assess concentration, overdue balances, and bad debt provisions. Compare against the previous year’s trend.
• Nature of Accruals: Clarify the composition of the £482,919 accrual balance. Is it related to payroll, professional fees, or contract costs? Obtain a breakdown.
• Director Resignations: Investigate the circumstances of Xxxxxx Xxxxxxxxname shown to subscribers’s and Xxxxxx Xxxxxxxxname shown to subscribers’s resignations. Were they planned, or do they reflect disagreement on strategy? Check for any associated settlement or compensation.
• Group Support Letter: Obtain a letter of financial support from Radnet, Inc. confirming continued backing, especially given the going concern statement references “support from the directors.”
• Revenue Recognition Policy: Given the shift from historic losses to profitability and the jump in debtors, review the company’s revenue recognition method (likely milestone or subscription) and confirm it aligns with FRS 102.

Names of the people mentioned are shown to subscribers. See subscription