GUIDE SECURITY SERVICES LIMITED

Risk Rating: MEDIUM
Justification: The company reports a solvent balance sheet with net assets of £6.13 million, positive shareholders’ funds, and no overdue statutory filings. However, the sharp decline in cash reserves alongside a material increase in debtors—most of which is owed by group undertakings—creates working-capital concentration risk. Recent director resignations also merit governance scrutiny.

Key Concerns
- Intercompany debtor concentration: Debtors due within one year rose from £1.11 million (2023) to £6.28 million (2024). Of this, £5.53 million is owed by group undertakings, representing approximately 88% of debtors and roughly two-thirds of current assets. Recoverability is therefore dependent on related parties rather than external trade receivables.
- Liquidity composition: Cash at bank and in hand fell from £6.07 million to £1.54 million over the same period. While the current ratio remains strong (current assets of £8.13 million against current liabilities of £2.01 million), the shift from cash to intercompany receivables reduces immediate liquidity.
- Board turnover: Three directors resigned on 30 June 2026 and a further director resigned on 7 July 2026, including the director who signed the 2024 accounts on behalf of the board. This level of recent board change warrants review of management continuity and governance.

Positive Indicators
- Solvency position: Net assets have grown steadily from £2.18 million (2019) to £6.13 million (2024), with shareholders’ funds equal to net assets and no balance-sheet insolvency indicators.
- Filing compliance: Accounts and confirmation statement are shown as not overdue. The latest accounts were audited and prepared under the small companies regime (FRS 102 Section 1A).
- Operational track record: Incorporated in 1996, the company reports a stable average headcount of 49 employees and operates in private security activities (SIC 80100), serving a defined niche in remote monitoring and alarm response.
- Going concern assertion: The accounts state that the financial statements have been prepared on a going concern basis.

Due Diligence Notes
- Obtain the repayment terms, interest, and security for the £5.53 million owed by group undertakings, and assess recoverability if related-party support were withdrawn.
- Request an explanation for the £4.53 million reduction in cash alongside the debtor increase, including cash-flow details not presented in the summary data.
- Review the £80,000 provision for liabilities and any contingent liabilities or guarantees.
- Clarify the share capital position: the company overview lists £500,000, while the filed accounts show £150,000 of called-up share capital.
- Confirm whether accounts for the year ended 30 April 2025 (indicated in the company overview) have been filed and whether they are consistent with the 2024 trend.
- Assess trade-debtor concentration outside the group (£632,782) and verify regulatory permissions applicable to private security activities.