EMPLAS WINDOW SYSTEMS LIMITED

Risk Rating: LOW

Justification: The company reports a strong and improving balance sheet, with net assets of £12.35m at 30 April 2025, positive net current assets of £9.84m, and cash of £1.58m. Accounts are audited, filings are not overdue, and the business has operated since 1985. The rating is not lower because ownership is concentrated in a single corporate shareholder and the end markets are cyclical.

Key Concerns

1. Ownership concentration: The persons with significant control register shows a single corporate entity, Lilliput Holdings Ltd, holding more than 75% of the company’s shares. This concentrates control over dividends, strategy and board composition, and may limit minority investor protections.

2. Sector cyclicality: The principal activity is the manufacture and sale of PVC-U windows, doors and conservatories for home improvement and new build sectors. Performance is therefore exposed to housing market conditions, interest rates and consumer discretionary spending.

3. Board depth and recent changes: The board comprises three directors. One individual holds both director and secretary roles. The accounts record that a director resigned on 4 April 2025, shortly before the financial year end.

Positive Indicators

• Profitability and growth: Turnover increased 11.9% to £61.47m in the year to 30 April 2025, with profit before tax up 14.2% to £3.26m and EBITDA of £4.21m.
• Strengthening balance sheet: Net assets have grown from £3.96m (year ending 2020) to £12.35m (year ending 2025), with shareholders’ funds equal to net assets.
• Liquidity position: Net current assets were £9.84m at the 2025 year end, and cash increased from £0.43m to £1.58m over the prior year. The accounts state that the company seeks to ensure sufficient cash is freely available to meet foreseeable needs.
• Compliance and track record: Incorporated in 1985, the company is active and not in liquidation. Accounts and confirmation statement filings are not overdue, and the latest accounts are audited under FRS102.

Due Diligence Notes

• Obtain the filed accounts for the years ending 30 April 2022 and 30 April 2023, which are absent from the provided financial history, to complete the five-year trading record.
• Review the maturity breakdown of liabilities, including hire purchase and finance lease arrangements referred to in the accounts, to assess fixed repayment commitments.
• Confirm the identity and financial standing of Lilliput Holdings Ltd and request details of any related party transactions or shareholder agreements.
• Verify the contents of the post balance sheet events note, which was truncated in the provided accounts text.
• Clarify the next accounts filing deadline, as the data shows 31 January 2027, which appears longer than the standard nine-month period for a private company.