STANWAY ENGINEERING LIMITED
Company number 03396783 · 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.
CREDIT ANALYSIS: STANWAY ENGINEERING LIMITED
1. CREDIT OPINION: DECLINE
Reasoning: This company presents an unacceptable credit risk. It has been technically insolvent for at least a decade with negative net assets that have deteriorated from £-38,908 (2015) to £-430,722 (2024). The balance sheet deficit has accelerated sharply, increasing by £87,383 in the latest year alone. Cash stands at a negligible £21, and net current liabilities of £-184,107 demonstrate an acute inability to meet short-term obligations from current resources. The company survives solely on director forbearance and creditor tolerance, not operational viability.
2. FINANCIAL STRENGTH: Critical / Severely Distressed
Balance Sheet Summary (Year Ending 31 July 2024):
| Metric | 2024 | 2023 | Movement |
|---|---|---|---|
| Total Assets | £343,776 | £447,353 | -£103,577 |
| Total Liabilities | £774,498 | £790,692 | -£16,194 |
| Net Assets | £-430,722 | £-343,339 | -£87,383 |
| Cash | £21 | £12,667 | -£12,646 |
| Shareholders' Funds | £-430,822 | £-343,439 | -£87,383 |
Key Observations:
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Chronic Insolvency: The company has carried negative net assets since at least 2015. The deficit has grown sevenfold over the period, from approximately £39,000 to £431,000. This is not a temporary setback but a sustained structural problem.
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Minimal Equity Buffer: Share capital of just £100 with accumulated losses of £430,822 means there is no meaningful equity cushion. Any unexpected loss or creditor demand could trigger formal insolvency.
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Asset Quality Concerns: Fixed assets of £266,453 are predominantly plant and machinery (£231,726). These are specialized assets likely with limited resale value and uncertain realizable worth in a forced sale scenario. The freehold property (£29,238) provides minimal security.
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Debtors Deterioration: Trade and other debtors fell from £98,014 to £20,711, which could indicate either improved collections or, more concerning, write-offs and reduced business activity.
3. CASH FLOW ASSESSMENT: Acute Liquidity Crisis
Working Capital Position:
| Metric | 2024 | 2023 |
|---|---|---|
| Current Assets | £77,323 | £167,272 |
| Current Liabilities | £261,430 | £296,612 |
| Net Current Assets/(Liabilities) | £-184,107 | £-129,340 |
| Current Ratio | 0.30:1 | 0.56:1 |
Critical Findings:
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Near-Zero Cash: Cash of £21 is effectively nil. The company has no liquidity buffer whatsoever and is entirely dependent on creditor forbearance and director support for day-to-day operations.
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Worsening Working Capital Deficit: Net current liabilities have deteriorated by £54,767 (42%) year-on-year. The current ratio of 0.30:1 indicates the company can only cover 30p of every £1 of short-term obligations from current assets.
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Creditor Concentration Risk: Trade creditors of £353,946 (due after one year) and £0 (due within one year, down from £71,027) suggest suppliers have either extended terms significantly or lost patience. The "other creditors" balance of £226,353 (current) and £85,000 (long-term) requires clarification—these may include related-party balances.
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Bank Borrowings: Modest bank loans of £74,122 (long-term) and £4,497 (overdraft) are manageable in isolation but add to an already over-leveraged position.
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Going Concern Dependency: The accounts explicitly state the company is "supported by the director's" who have "agreed to provide their support for a period no less than twelve months." This is a material uncertainty regarding going concern—the company cannot survive without continued director subsidies.
4. MONITORING POINTS: If Exposure Exists
| Risk Area | Metric to Monitor | Current Status | Threshold for Concern |
|---|---|---|---|
| Liquidity | Cash position | £21 (critical) | Below £5,000 |
| Solvency | Net assets | £-430,722 (deteriorating) | Any further decline |
| Creditor Pressure | Trade creditors movement | £353,946 (long-term) | Any acceleration of demands |
| Director Support | Written confirmation of ongoing support | Stated in accounts but informal | Withdrawal or qualification |
| Filing Compliance | Accounts/confirmation statement | Currently up to date | Any overdue filings |
| Employee Count | Staff numbers | 5 (up from 4) | Significant reductions |
| Related Party Balances | Other creditors breakdown | £226,353 current + £85,000 long-term | Any shift to arms-length creditors |
| Debtors | Trade debtor collections | £1 current trade debtor | Failure to recover outstanding amounts |
Additional Red Flags: - The long-term trade creditor balance of £353,946 is highly unusual and suggests either related-party financing or suppliers who have effectively written off amounts due - The dramatic fall in current trade creditors from £71,027 to £0 may indicate suppliers have stopped extending credit - The long-term trade debtor of £18,960 (due after one year) is anomalous for a repair/maintenance business and warrants investigation
SUPPLEMENTARY NOTES
Director Assessment: name shown to subscribers (75%+ shareholder) and name shown to subscribers (director/secrety) bear significant responsibility for this deteriorating position. No disqualification records were found, but the sustained erosion of net assets over a decade raises questions about financial stewardship and the viability of the business model.
Industry Context: Operating in transport equipment repair and vehicle leasing (SIC 33170/77110), the company faces capital-intensive operations requiring ongoing investment. The addition of £62,000 in plant and machinery during 2024 suggests continued operational activity, but this investment has been funded entirely by creditor extension rather than profitable operations.
Related Party Considerations: The "other creditors" balances totaling over £311,000 likely include director loans. If these are subordinated, they provide some buffer, but if they are being called, the company would face immediate insolvency.