EPS SERVICES & TOOLING LIMITED

Credit Opinion: CONDITIONAL

EPS Services & Tooling Limited presents a strong balance sheet and improving liquidity, supporting a favourable credit view. However, the statutory accounts are unaudited under the small companies exemption, profitability is presented through the directors’ narrative rather than a filed profit and loss account, and ownership is concentrated with a single person with significant control holding between 50% and 75% of shares and voting rights. A credit facility should be approved subject to: (a) a debenture or fixed and floating charge over company assets; (b) a personal guarantee from the controlling shareholder; and (c) ongoing receipt of certified interim management accounts.

Financial Strength

• Net assets increased to £1.83m at 31 March 2025 from £1.75m in the prior year; shareholders’ funds are £1.83m.
• Tangible fixed assets of £1.29m comprise mainly land and buildings, plant and machinery.
• Long-term creditors are modest at £165k, with provisions of £272k (primarily deferred tax). Gearing is low, at roughly 9% of equity.
• Net assets have grown consistently over the longer term, from approximately £0.71m at 31 March 2013 to £1.83m at 31 March 2025.
• During the year the company completed a share capital reduction, repurchasing 11,780 shares for £35,340, while retaining a strong equity base.

Cash Flow Assessment

• Cash at bank and in hand strengthened to £535k at 31 March 2025 from £248k in the prior year.
• Cash covers approximately 73% of current liabilities of £737k.
• Net current assets are £980k, giving a current ratio of approximately 2.3:1.
• Working capital comprises stocks of £410k, debtors of £772k, and creditors due within one year of £737k. Debtors have risen in line with turnover growth.
• No cash flow statement is filed because the company qualifies for the small companies exemption; liquidity is therefore assessed from balance sheet movements and the directors’ commentary.
• The directors’ report states profit before taxation of £342k for 2025. The prior year result of £863k included an exceptional gain of approximately £612k from a sale and leaseback of the Wiveliscombe site, so underlying profitability should be assessed on a normalised basis.

Monitoring Points

• Debtor collection period as turnover grows from £3.33m to £3.84m.
• Stock turnover and potential obsolescence in precision machining and tooling.
• Maintenance of cash reserves at a level comfortably covering current liabilities.
• Exposure to demand cycles in the timber and sawmilling industry, the company’s principal customer base.
• Receipt of interim management accounts given unaudited statutory filings.
• Any change in the shareholding or voting control of the person with significant control.
• Movement in long-term creditors and provisions for liabilities.