FUTURE NETWORK SOLUTIONS LIMITED

Credit Opinion: DECLINE

The company record indicates Future Network Solutions Limited is in liquidation (in_liquidation: True). A company in liquidation is undergoing formal closure, with control of its assets passing to a liquidator for the benefit of creditors. It is not legally or practically able to take on new borrowing, and its directors cannot bind it to new credit obligations. On this basis alone, no new credit facility should be extended.

Even disregarding the liquidation status, the most recent detailed filed accounts (year ended 29 June 2023, prepared under the small companies regime and audit-exempt) show a business in electrical installation (SIC 43210) that has improved its net asset position but remains thinly capitalised and dependent on debtor collections.

Financial Strength

• Net assets improved from a deficit of £86,203 at 30 June 2021 to £746,244 at 29 June 2023. Shareholders’ funds stand at £746,244.
• However, called-up share capital is only £200, providing minimal permanent equity cushion.
• Fixed assets declined from £584,830 (2022) to £442,719 (2023), indicating asset depreciation or realisation without replacement.
• Total creditors due within one year are £1,539,221, roughly double the cash balance and a significant proportion of total assets (£2,338,465).
• A provision for liabilities of £53,000 is carried.
• The balance sheet is heavily weighted toward debtors (£1,795,177), meaning much of the apparent net asset strength depends on collecting contract receivables.

Cash Flow Assessment

• Cash at bank and on hand was £65,405 at 29 June 2023, up from £15,369 the prior year, but still low relative to the scale of short-term liabilities.
• Net current assets were positive at £356,525 in 2023, compared with a negative £288,086 in 2022, showing an improved working capital position on paper.
• The debtor balance of £1.8m suggests working capital is locked up in contract receivables. In an electrical installation business, collection timing can be lumpy and exposed to customer retention or payment disputes.
• No cash was reported for the years ended 2019 and 2021, indicating historical liquidity strain.
• Because the company is in liquidation, any cash flow is controlled by the liquidator, not management, and is directed toward creditor distributions rather than debt servicing for new lenders.

Monitoring Points

• Progress of the liquidation and the liquidator’s realisation of assets, particularly the £1.8m debtor book and fixed assets.
• Likely dividend or recovery prospects for any existing unsecured exposure.
• Status of any security or guarantees held by the bank.
• Completion of ongoing contracts and collection of retention monies.
• Whether any trading entity emerges from the liquidation process (unlikely), in which case renewed trading cash flow, debtor days, and creditor payment terms would require reassessment.