SUR-CLEAN SYSTEMS LIMITED
Company number 02552762 · 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.
Commercial Credit Assessment: SUR-CLEAN SYSTEMS LIMITED
1. Credit Opinion: CONDITIONAL
Reasoning: This 34-year-old family-run business demonstrates moderate financial stability with consistent net asset growth over the longer term and a positive working capital position. However, significant concerns exist regarding the declining total asset base (41% reduction from £267k in 2022 to £158k in 2024), limited financial transparency due to micro-entity filing, and the absence of profit & loss data. Credit facilities should be considered on a case-by-case basis with appropriate safeguards, particularly for unsecured lending.
2. Financial Strength
Balance Sheet Summary (2024 vs 2023):
| Metric | 2024 | 2023 | Movement |
|---|---|---|---|
| Fixed Assets | £22,903 | £30,893 | -25.8% |
| Current Assets | £135,301 | £157,225 | -13.9% |
| Current Liabilities | (£77,650) | (£91,417) | -15.1% |
| Long-term Liabilities | £0 | (£12,892) | Cleared |
| Net Assets | £79,721 | £76,906 | +3.7% |
Key Observations:
- Net asset improvement: Net assets have grown from £18,429 (2017) to £79,721 (2024), representing substantial value creation over the longer term. The £2,815 increase year-on-year indicates retained profitability.
- Asset contraction: Total assets have declined significantly from their 2022 peak of £267,236 to £158,204. This warrants investigation - it may reflect asset realisation, reduced trade debtors, or cash extraction.
- Deleveraging: The elimination of long-term creditors (£12,892 cleared) and reduction in current liabilities is positive, though this may have consumed cash reserves.
- Minimal capital base: Share capital of only £180 represents an extremely thin equity cushion relative to the business's asset base.
- Current ratio: Approximately 1.74x (£135,301/£77,650) - adequate for short-term obligations but declining from prior years.
3. Cash Flow Assessment
Liquidity Position:
- Working capital: £59,893 (down from £69,080) - positive but trending downward
- Cash history (where available): Declined from £114,694 (2020) to £98,065 (2022); 2023-2024 figures not disclosed
- Prepayments: £2,242 (down from £3,272) - minor reduction
Concerns:
- The absence of cash data for 2023 and 2024 is problematic. Given the reduction in current assets and the clearance of long-term debt, cash may have deteriorated further.
- No P&L account is filed (permitted under micro-entity regime), making it impossible to assess operating cash generation, margins, or revenue trends.
- The reduction in creditors falling due within one year (£91,417 to £77,650) may indicate supplier pressure for faster payment or reduced trade credit availability.
- Staff numbers increased from 3 to 4, adding to fixed overheads without visibility on revenue impact.
Positive Indicators:
- Long-term liabilities cleared, reducing ongoing debt service requirements
- Provisions of £7,723 released, suggesting prior uncertainties resolved
- Business has survived 34 years including multiple economic cycles
4. Monitoring Points
| Metric | Current Status | Risk Threshold | Action Required |
|---|---|---|---|
| Total assets trend | Declining | Further decline >15% | Request management explanation |
| Cash position | Unknown (2024) | Below £50k | Obtain bank statements |
| Current ratio | 1.74x | Below 1.2x | Enhanced monitoring |
| Filing compliance | Current | Overdue accounts | Standard monitoring |
| Related party transactions | Not disclosed | Material withdrawals | Request disclosure |
| Employee costs vs revenue | Unknown | Deteriorating margins | Request management accounts |
| Debtor days | Unknown | Exceeding 60 days | Request aged debtor analysis |
Specific Conditions for Facility Approval:
- Obtain recent management accounts - Micro-entity filings provide insufficient visibility on trading performance
- Request bank statements - Verify current cash position and trading patterns
- Seek explanation for asset decline - Understand whether this reflects business contraction, asset sales, or other factors
- Limit unsecured exposure - Given limited disclosure and thin capital base, unsecured facilities should be modest (suggest maximum 25% of net assets)
- Consider personal guarantees - Given family ownership structure and minimal share capital, director guarantees would strengthen position
Industry Context:
The company operates in industrial machinery repair and installation (SIC 33120/33200) - typically a stable, counter-cyclical sector where maintenance spend continues during downturns. This provides some resilience, though the small scale (4 employees) limits capacity for large contracts.