Investment Risk Analysis: UBS HOISTS AND ACCESS LIMITED

1. Risk Rating: MEDIUM

Justification: The company demonstrates persistent negative working capital and accumulated losses eroding the capital base, which raises solvency and liquidity concerns. However, the trend is improving (net assets increased 33% to £602,426, and P&L reserve losses reduced from £547,544 to £397,674), the company remains solvent with positive net assets, and operational indicators (growing employee count from 48 to 53) suggest business activity is expanding. The reliance on trade creditors to fund operations is a structural vulnerability but is not uncommon in the construction sector.

2. Key Concerns

Concern 1: Persistent Negative Working Capital

Current liabilities (£4,069,142) significantly exceed current assets (£3,207,987), resulting in net current liabilities of £861,155. While this has improved from £1,225,312 in the prior year, the company remains dependent on trade creditor forbearance and timely debtor collection to meet short-term obligations. The current ratio stands at approximately 0.79, well below the 1.0 threshold typically considered adequate.

Concern 2: Accumulated Losses Eroding Capital Base

The profit and loss account shows accumulated losses of £397,674 against share capital of £1,000,100, meaning approximately 40% of shareholders' capital has been eroded. Although the trend is improving (down from £547,544), the company has a history of trading losses that has weakened its financial resilience.

Concern 3: Trade Debtor Concentration and Collection Risk

Trade debtors increased significantly from £1,836,191 to £2,186,391 (up 19%), and other debtors rose dramatically from £260,895 to £631,669 (up 142%). This substantial growth in debtors, particularly the unexplained increase in other debtors, raises questions about collectability and potential bad debt risk. The debtor days would require investigation relative to revenue.

3. Positive Indicators

• Improving Financial Trajectory: Net assets increased from £452,556 to £602,426 (+33%), and accumulated losses reduced by £149,870, suggesting the company returned to profitability in the latest period.

• Compliant Filing Record: Accounts and confirmation statements are filed on time with no overdue status, indicating adequate governance and administrative discipline.

• Operational Growth: Employee numbers increased from 48 to 53, suggesting business expansion rather than contraction, which is consistent with a company that may be trading through a recovery phase.

• Modest Long-term Debt: Long-term creditors remain static at £258,405, with the disclosed loans carrying only 4% interest and being repaid by monthly instalments. This is manageable and does not present an imminent refinancing risk.

• Cash Position Stable: Net cash (after overdraft) of £331,984 has been maintained, suggesting the company is not burning through cash reserves despite the working capital deficit.

4. Due Diligence Notes

1. Going Concern Assessment: The accounts do not explicitly reference a going concern basis, which is notable given the persistent net current liabilities. Investigate whether directors have provided any formal going concern statement or assessment, and whether trade creditors have indicated willingness to continue supplying on credit terms.

2. Other Debtors Composition: The 142% increase in other debtors from £260,895 to £631,669 requires explanation. Determine whether this represents inter-company balances, loans to related parties, or other items that may not be readily realisable.

3. Trade Creditor Dependency: With trade creditors at £3,509,364 (approximately 87% of total current liabilities), investigate the terms being negotiated with suppliers, any concentration risk with key suppliers, and whether any suppliers have issued statutory demands or threatened to withdraw credit facilities.

4. Director Resignation: Xxxxxx Xxxxxxxxname shown to subscribers resigned on 28 August 2026. Understand the circumstances of this departure, whether it represents any governance concern, and whether a replacement director has been or will be appointed. The company currently has only one active director (Xxxxxx Xxxxxxxxname shown to subscribers), who also holds >75% control as PSC.

5. Revenue and Profitability: As a small company filing under Section 1A of FRS 102, the profit and loss account is not filed. Obtain management accounts or full financial statements to assess revenue trends, gross margins, and operating profitability to validate whether the improvement in net assets is sustainable.

6. Contingent Liabilities: The accounts note references judgments regarding estimation uncertainty, particularly around investment properties. Investigate whether any contingent liabilities, legal claims, or guarantee commitments exist that are not reflected on the balance sheet.

7. Related Party Transactions: Given the concentrated ownership structure (Xxxxxx Xxxxxxxxname shown to subscribers >75%), examine whether any related party transactions exist, particularly regarding the other debtors balance and any loans to/from the director.

8. Sector-Specific Risks: As a specialised construction business (SIC 43999), investigate contract pipeline, retention balances typically held by clients, and exposure to construction sector payment practices and insolvency risk in the supply chain.

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