HELPLINE LTD

1. Credit Opinion

CONDITIONAL — not approvable on standalone strength.

The latest detailed accounts available (unaudited, for the 11-month period ended 3 April 2023) show a weak standalone credit profile:

• Net liabilities of £4,972.
• Net current liabilities of £38,776.
• Cash of £92,444 covers only around 31% of current liabilities of £295,234.

The company is a subsidiary and the accounts state the reporting period was shortened to the date the company was sold. The directors have asserted a going concern basis, but the balance sheet provides little standalone headroom.

A facility could be considered only if:

• A parent company guarantee or suitable security is provided.
• There is clear evidence of ongoing group/creditor support, including subordination of intercompany balances.
• The latest accounts to 31 March 2025 are reviewed and show an improved position.
• The facility has a defined repayment source from operating cash flow.

Without those mitigants, the appropriate decision would be DECLINE.

2. Financial Strength

Balance sheet health is weak.

At 3 April 2023:

• Total assets: £392,155
• Total liabilities: £397,127
• Net assets: -£4,972
• Shareholders’ funds: -£4,972
• Profit and loss reserve: -£5,072

Fixed assets were £135,697, mainly tangible assets of £127,987 and intangible software of £7,710. The accounts note that vehicles are not depreciated and are carried at market value determined by the directors, which adds some valuation uncertainty.

The equity position has deteriorated over time:

• 2017: net assets £26,889
• 2018: net assets £29,080
• 2019: net assets £18,955
• 2020: net assets £713
• 2022: net assets £625
• 2023: net liabilities -£4,972

This is a sustained erosion of reserves. The company is now dependent on creditor forbearance or group support to continue.

3. Cash Flow Assessment

The filed extract does not include a full profit and loss account or cash flow statement, so operating cash generation and debt service capacity cannot be directly verified.

Key liquidity points:

• Cash at bank: £92,444
• Debtors: £157,014
• Stocks: £7,000
• Current liabilities: £295,234
• Net current liabilities: -£38,776

The current ratio is approximately 0.87, and the quick ratio is approximately 0.85. Both are below 1, meaning current assets do not fully cover short-term obligations.

Cash increased from £66,183 in 2022 to £92,444 in 2023, but current liabilities also rose sharply from £175,372 to £295,234. This suggests the company is increasingly reliant on short-term creditor funding. Debtor collection and the composition of current liabilities are therefore critical.

The accounts state the directors have a reasonable expectation that the company can meet its obligations for at least 12 months, but this is an assertion in the accounts rather than independently verified evidence.

4. Monitoring Points

If credit is advanced, the following should be monitored closely:

• Latest 31 March 2025 accounts: confirm whether the company has returned to positive net assets and whether the going concern position has strengthened.
• Current liability composition: how much is owed to group undertakings versus trade creditors, and whether those balances are subordinated.
• Debtor performance: debtor days, ageing, collection rates, and any concentration risk.
• Cash conversion: monthly recurring revenue, churn, and cancellation trends for monitored alarm subscriptions.
• Long-term creditor schedule: £69,850 falls due after more than one year; repayment terms and headroom should be confirmed.
• Asset valuation: the policy of not depreciating vehicles and carrying them at director-determined market value should be reviewed.
• Ownership and group support: any changes in the parent structure or evidence of reduced group support would be a material credit event.
• Regulatory and service risk: as a health-related alarm provider, service continuity, data protection, and complaint trends matter for revenue stability.