ROGER SIMPSON LIMITED
Company number 01372857 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Thank you for providing the financial records for Roger Simpson Limited. I have conducted a thorough diagnostic assessment of the company's financial health based on the data supplied.
1. Financial Health Score: C- (Fair, but with significant strain)
This grade reflects a company with a fundamentally sound underlying asset base that is currently experiencing acute short-term liquidity distress. The patient has a strong heart (tangible assets) but is suffering from a severe circulatory problem (cash flow) and is heavily reliant on a life-support machine (creditor funding and group support).
2. Key Vital Signs
| Vital Sign | 2025 Reading | 2024 Reading | 2023 Reading | Interpretation |
|---|---|---|---|---|
| Shareholders' Funds | £885,585 | £713,867 | £2,125,397 | Stable but recovering. A major drop in 2024 was partially reversed in 2025, showing a return to profitability. |
| Net Current Assets (Working Capital) | -£338,749 | -£552,473 | Not provided | Critical Condition. The company has far more short-term debt than short-term assets. This is a classic symptom of financial distress. |
| Cash at Bank | £490 | £231 | £16,120 | Flatline. Cash reserves are negligible. The company is operating with no liquidity buffer, making it vulnerable to any unexpected payment. |
| Total Liabilities | £1,672,127 | £1,289,924 | £1,896,993 | Elevated. A sharp increase in 2025 indicates a heavy reliance on borrowing or supplier credit to fund operations and stock. |
3. Diagnosis: Acute Working Capital Deficiency with Positive Underlying Vitality
The company presents a contradictory picture.
-
The Good News (The Underlying Health): The company has a strong, long-term asset base of £1.22m in tangible assets (property and equipment). Crucially, the retained earnings swung from a loss of -£190,182 in 2024 to a loss of only -£18,464 in 2025. This suggests the core business operations have returned to a near-breakeven or slightly profitable position, generating a profit of approximately £171,718 this year. This is a significant and positive recovery in the company's "metabolism."
-
The Bad News (The Acute Symptoms): The company is suffering from a severe working capital crisis. The negative net current liabilities of -£338,749 mean that all of its fixed assets are effectively funded by short-term debt. The cash balance of £490 is dangerously low. The massive stock increase from £558k to £1.19m has likely been funded by creditors (amounts due within one year rose from £1.29m to £1.67m). This is the financial equivalent of a patient whose heart is beating but whose blood pressure has dropped to zero.
The Prognosis: The company's survival depends entirely on two factors: 1. Stock Turnover: It must sell the increased stock of nearly £1.2m quickly to convert it back into cash. A slowdown in the car market would be catastrophic. 2. Group Support: The company is owned by RSL Holdings Limited. The directors' statement about "borrowings" and the large creditor balances suggest significant intercompany or bank financing. The company's prognosis is stable only as long as this group support continues.
If the stock sells as planned and the group continues to support it, the company can return to health. However, any disruption to either of these factors could be fatal.
4. Recommendations: The Treatment Plan
- Emergency Cash Management (Intensive Care): The priority is to generate cash. This means aggressively managing stock levels, offering incentives to sell existing vehicles, and negotiating extended payment terms with suppliers. The directors must produce a 13-week cash flow forecast immediately.
- Reduce Stock Levels (Surgery): The stock-to-cash conversion cycle is the company's primary problem. A plan is needed to reduce the stock holding to a level that can be supported by the available working capital, even if it means selling some vehicles at a lower margin.
- Review Financing Structure (Long-Term Therapy): The company is using short-term credit to finance long-term assets and stock. It should explore converting a portion of its short-term liabilities into a long-term loan or a capital injection from its parent company, RSL Holdings Limited. This would provide a stable financial foundation and alleviate the immediate pressure.
- Monitor Profitability (Check-up): The return to near-profitability in 2025 is excellent. The focus should now be on maintaining this trend and ensuring that any new sales are profitable enough to rebuild the company's cash reserves and retained earnings.