Credit Assessment: ROCKMOUNT UTILITIES LIMITED (NI623928)

1. Credit Opinion: CONDITIONAL

Rockmount Utilities Limited presents a low-geared, cash-rich balance sheet that can support credit, but limited financial disclosure and a pronounced two-year decline in net assets require conditions before facilities are committed.

Supporting factors: - Cash of £899k exceeds total current liabilities of £777k (1.16x cover) — the company could settle every short-term obligation from cash alone - No borrowings on the balance sheet; the only long-term liability is a £95k deferred tax provision - Positive working capital of £338k and a current ratio of 1.43 - 11 years of continuous trading; filings fully up to date - Equity base of £622k represents 42% of total assets

Reservations: - Net assets have fallen 69% from the £2.0m peak at FY2023: a £1.27m reduction in FY2024 and a further £108k in FY2025 - Accounts are unaudited and abridged with no income statement filed — turnover and profitability cannot be verified from public data - The FY2024 movement (net assets and cash both down ~£1.2m) is consistent with a substantial dividend distribution rather than a trading loss, but this cannot be confirmed from the filed data - Stocks/WIP fell 73% in FY2025 (£267k → £73k), which may signal a shrinking forward order book

Recommendation: Approve facilities sized conservatively against the cash position, conditional on receipt of full accounts or management information confirming ongoing profitability, and clarification of the FY2024 equity reduction.

2. Financial Strength

The balance sheet at 30 April 2025 is fundamentally sound: total assets £1.49m against liabilities of £872k, leaving £622k of shareholders' funds. Tangible fixed assets of £379k (with £60k of additions in the year) indicate a functioning asset base appropriate to a utility construction contractor, and continued capital investment suggests management confidence.

The longer trajectory shows impressive accumulation — net assets grew from £81k in 2016 to £2.0m in 2023, implying sustained profitability over seven years. The reversal since then is the central credit question. If driven by shareholder distributions, the underlying business may remain healthy; if trading-related, the contraction is material. The accounts also disclose a related party relationship with Xxxxxxxname shown to subscribers Contracts Limited (two directors are common to both companies), with £33.5k of management charges in the year and £42k owed at year end — modest in scale, but worth understanding.

3. Cash Flow Assessment

Liquidity is the strongest feature of this credit. Cash rose £94k in FY2025 to £899k, generated partly through running down stock/WIP. Debtors are low at £143k (though up 47% year-on-year), suggesting reasonable collection performance. Creditors of £777k provide supplier funding, but full cash cover removes refinancing risk. There are no visible debt service obligations — no bank loans, hire purchase or lease liabilities are disclosed. The principal cash flow risk is not operational but distributional: if the FY2024 outflow was a dividend, a repeat extraction would materially erode the liquidity buffer that underpins this assessment.

4. Monitoring Points

• Turnover and margin evidence — obtain full P&L or quarterly management accounts; public filings are insufficient
• Dividend policy — confirm distributions remain subordinate to retained liquidity covenants
• Order book and WIP — the 73% stock reduction needs explanation; verify contracted pipeline
• Debtor and creditor composition — utility sector work often carries contract concentration risk
• Related party balances — monitor the Xxxxxxxname shown to subscribers Contracts Limited position
• Filing compliance — currently clean; maintain watch given the unaudited status

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