DIGITEK TRADING LIMITED

1. Credit Opinion: CONDITIONAL

Digitek Trading Limited is an established wholesale business incorporated in 2006 with a consistently filed record and a strengthening balance sheet. Net assets have grown from £208k in 2017 to £733k at 31 March 2026, and the company holds £364k cash against £187k of creditors due within one year, with no long-term creditors. However, the latest accounts are abridged and filleted; the profit and loss account is not publicly filed, so profitability, margins, and debt-service capacity cannot be verified from the documents provided. Approval is therefore conditional on receipt of the trading profit and loss account or management accounts, confirmation of facility purpose, and standard credit underwriting checks.

2. Financial Strength

The balance sheet is strong and asset-light. Tangible fixed assets are modest at £38k, while current assets total £883k, dominated by cash, debtors, and stock. Net current assets are £701k, indicating a current ratio of approximately 4.7:1 and a robust working capital position. Shareholders’ funds equal net assets at £733k, and the company is effectively free of long-term debt (creditors due after more than one year fell from £11k in 2025 to nil in 2026). Retained earnings have accumulated steadily over the decade, although net assets dipped slightly between 2023 and 2025 before recovering in 2026, demonstrating some resilience. A single person with significant control holds more than 75% of shares, concentrating ownership but aligning control with equity.

3. Cash Flow Assessment

Cash at bank increased from £273k to £364k over the year to 31 March 2026 and covers current liabilities roughly twice over. Stocks fell by approximately £53k, releasing working capital, while debtors rose modestly to £231k. No cash flow statement is filed because the accounts are abridged, so liquidity is assessed from balance sheet movements rather than reported operating cash flow. Working capital appears well managed, but the wholesale computer peripherals sector carries inherent stock obsolescence and debtor credit risk that could affect cash conversion in a downturn.

4. Monitoring Points

• Obtain and review the profit and loss account or management accounts to verify profitability and debt-service coverage.
• Monitor debtor aging and concentration; wholesale trade credit exposures can deteriorate quickly.
• Track stock levels and turnover for obsolescence in computer peripherals.
• Confirm the cash position remains stable across trading cycles; no long-term debt currently exists, but monitor for new borrowings.
• Monitor changes in the PSC register or ownership, given the controlling interest above 75%.
• Ensure continued timely filing of accounts and confirmation statements.