PRECISION CARGO SERVICES LIMITED

Risk Rating: MEDIUM

The company currently demonstrates strong solvency and liquidity, with net assets of £2.12 million and cash at bank of £1.17 million at 30 April 2026, together with up-to-date regulatory filings. However, this follows five consecutive years of negative net assets from 2017 to 2021, including a cash balance of just £6 at 30 April 2020. The accounts are unaudited, filed under the small-company regime, and do not include a publicly filed income statement, which limits independent verification of profitability and the durability of the recent turnaround.

Key Concerns

1. Recent history of balance sheet insolvency: The company reported negative net assets in every year from 2017 to 2021, reaching net liabilities of £75,644 at 30 April 2020. Although the position has since reversed, the filed balance sheet does not explain the mechanism or sustainability of the recovery.
2. Limited financial disclosure: As a small company claiming audit exemption, the company files a balance sheet only; the income statement is not delivered to the registrar. Investors cannot assess revenue, gross margin, operating profit, or cash flow from publicly available documents.
3. Debtor exposure and creditor composition: Debtors of £1.09 million represent a large proportion of total assets. Creditors falling due after more than one year increased from £5,077 to £123,448 between 2025 and 2026, and provisions for liabilities rose from £74,641 to £91,035. The aging and collectability of debtors, and the nature of longer-term obligations, are not disclosed in the filed balance sheet.

Positive Indicators

1. Strong current liquidity: Cash at bank of £1.17 million and net current assets of £1.88 million provide a substantial buffer against short-term creditors of £390,978.
2. Improved equity position: Net assets have grown from £183,217 at 30 April 2022 to £2,121,486 at 30 April 2026, with five consecutive years of positive net assets.
3. Regulatory compliance: The company is active, not in liquidation, and both accounts and confirmation statement filings are shown as not overdue. It has been incorporated since 1990.
4. Going concern statement: The directors have assessed the company’s position and state that it has adequate resources to continue operating for at least 12 months from the date of approval of the financial statements.

Due Diligence Notes

• Request the income statement and cash flow statement for the period ended 30 April 2026 and prior years to evaluate profitability and cash generation.
• Investigate the factors behind the transition from negative net assets in 2021 to positive net assets of £2.12 million in 2026, including any capital injections, debt restructuring, or changes in accounting treatment.
• Review the debtor ledger and aging analysis for the £1.09 million debtor balance, including any significant customer concentrations or doubtful allowances.
• Obtain details of the £123,448 creditors due after more than one year and the £91,035 provisions for liabilities.
• Clarify the ownership and control structure, given that Classic Freight Holdings Limited is recorded as a person with significant control holding more than 75% of shares and voting rights, alongside individual persons with significant control.
• Confirm the circumstances of the director resignation effective 8 June 2026 and any changes to the board since the balance sheet date.
• Consider the independence of the reporting accountants, Seymour Taylor Limited, which shares the company’s registered office address.
• Check the Insolvency Service and Companies House records for any director disqualifications or regulatory actions against current officers.