UNEEK FREIGHT SERVICES LIMITED

Risk Rating: LOW

Justification: The company demonstrates a strong balance sheet with positive net assets, improving liquidity year-on-year, and a long operational history (since 1978). While the current liabilities slightly exceed current assets, the overall solvency position is robust, and the business appears operationally stable with a clear going concern statement from the directors.

Key Concerns

1. Negative Net Current Assets (Working Capital Deficit): As of 31 March 2025, current liabilities (£1,021,023) exceed current assets (£1,011,533), resulting in a working capital deficit of £9,490. While this is a relatively small deficit and an improvement from the prior year's deficit of £130,740, it indicates that the company may need to rely on short-term financing or asset sales to meet immediate obligations. This is a structural risk in the event of a sudden downturn.

2. High Leverage on Tangible Fixed Assets: Total liabilities (£1,021,023) are substantial relative to the company's tangible fixed asset base (£1,290,622). The company's net assets are heavily supported by a revaluation reserve (£567,930) and retained earnings, but the reliance on debt to finance operations is notable. A significant portion of the balance sheet is tied up in fixed assets, which may not be readily liquidated to cover short-term debts.

3. Concentration of Control: The company is 100% owned by a corporate entity (Uneek Forwarding Limited), with significant influence held by a small group of individuals. This creates key-person risk and governance concentration. Any disruption to the parent or the controlling individuals could materially affect the company's strategic direction and financial stability.

Positive Indicators

• Strong Solvency Position: Net assets have grown steadily from £1,168,284 (2020) to £1,281,164 (2025), indicating consistent retained profitability and a solid equity cushion. The company's total assets exceed total liabilities by a comfortable margin.
• Improving Liquidity: Cash at bank has more than doubled from £92,761 (2024) to £204,548 (2025), a significant improvement in immediate liquidity. The working capital deficit has also narrowed substantially year-on-year.
• Long Track Record and Stable Operations: Incorporated in 1978, the company has a 47-year history of continuous operation. The directors have provided a clear going concern assessment with no material uncertainties identified. The accounts are audited and filed on time, indicating good compliance discipline.

Due Diligence Notes

1. Investigate the Nature of Current Liabilities: Request a detailed breakdown of the £1,021,023 in current liabilities. Determine how much is trade creditors versus short-term borrowings or intercompany balances. This will clarify whether the working capital deficit is a timing issue (e.g., large unpaid invoices) or a structural funding gap.

2. Review the Revaluation Reserve: The revaluation reserve of £567,930 is a non-cash reserve that has remained static for the last three years. Confirm the basis and date of the last revaluation of freehold property. If the revaluation is outdated, the true net asset position may be higher or lower than stated.

3. Assess Parent Company and PSC Risks: Obtain the financial statements of Uneek Forwarding Limited (the 100% shareholder) to assess its financial health. Evaluate the succession plans and contingency arrangements for the key individuals (Xxxxxx Xxxxxxxxname shown to subscribers, Xxxxxx Xxxxxxxxname shown to subscribers, Xxxxxx Xxxxxxxxname shown to subscribers) who hold significant influence.

4. Examine Debtor Quality: Debtors have increased to £806,985 (from £728,743). Review the aged debtor analysis and any provisions for bad debts. In a freight forwarding business, credit terms to customers can be extended, so the collectability of these receivables is critical.

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