IM EXPORT SERVICES LIMITED

1. Credit Opinion: APPROVE

The company demonstrates consistent growth in net assets, a positive working capital position, and a track record of profitability. Debt service capacity appears adequate given the upward trajectory in shareholders’ funds and the absence of overdue filings or adverse director conduct. Approval is recommended for standard unsecured credit facilities up to a prudent limit, subject to ongoing monitoring of working capital efficiency and debt levels.

2. Financial Strength

• Balance Sheet Growth: Net assets have increased from £95,769 (2019) to £401,509 (2025), representing a compound annual growth rate of approximately 27%. Shareholders’ funds stand at £401,409.
• Asset Base: Total assets of £1,160,112 are well above total liabilities of £789,773 (current liabilities £713,982 + long-term creditors £31,170 + deferred tax £44,621). The debt-to-equity ratio of 1.97x is elevated but not alarming for a growing SME with tangible assets.
• Tangible Fixed Assets: Increased to £178,484 (2025) from £130,733 (2024) due to £95,413 in additions, indicating reinvestment in productive capacity. Assets include finance leases with a net book value of £17,192.
• Profitability: Retained earnings rose by £97,309 in the latest year, implying strong operating performance. No income statement is provided, but the movement in reserves supports this view.

3. Cash Flow Assessment

• Liquidity: Cash at bank of £110,207 is moderate relative to current liabilities of £713,982. The current ratio is 1.37x and the quick ratio is 1.22x, both comfortable but not high.
• Working Capital: Net current assets increased to £267,646 (2025) from £237,320 (2024). Debtors of £760,000 represent a large proportion of current assets (77%). Stocks are manageable at £111,421.
• Cash Conversion: Cash decreased by £14,227 year-on-year despite likely profitability, primarily due to fixed asset investment and a modest rise in debtors. This pattern is typical for a growing business but warrants monitoring to ensure cash generation keeps pace with expansion.

4. Monitoring Points

• Debtor Days: Debtors of £760,000 against implied turnover (not disclosed) could be high. Request latest turnover figure and ageing analysis to assess collection performance.
• Leverage: Total liabilities to shareholders’ funds at 1.97x is a key covenant metric. Any further increase above 2.5x would signal stress.
• Cash Buffer: Maintain minimum cash coverage of at least one month’s operating expenses (estimated at £60k–£80k based on 38 staff and overheads). Current levels are adequate but tight.
• Finance Lease Commitments: £17,192 net book value of assets under finance leases; ensure lease payments are being met and are included in cash flow projections.
• Director Overlap: Xxxxxx Xxxxxxxxname shown to subscribers is both director and PSC with >75% control. No disqualifications noted, but any change in his personal circumstances should be flagged.

Names of the people mentioned are shown to subscribers. See subscription