Credit assessment · public-source basis

Tandem Group plc

Tandem designs and imports bicycles and e-bikes, licensed wheeled toys, golf trolleys and home and garden products, and sells them to UK national retailers, independent dealers and online marketplaces, plus a small direct-to-consumer e-bike business (Electric Life).

Assessed 30 September 2026 · audited financials to December 2025 · unaudited interim to 30 June 2026
Summary

The report on one page

Avexo Policy Grade C. Conditional approval: clear the conditions register before drawing.

Evaluated as a borrower for supply chain or invoice finance. House view £0.75M, range £0.38M to £1.51M by risk appetite (the model supports £1.32M; policy ceilings bind). 1 of 12 covenants measured has fired.

What decides it

  1. The incumbent bank, its security and the renewal. Every asset a lender would look to is already charged, and the incumbent's working-capital lines are up for renewal.
  2. Earnings against their own history, and a prior covenant breach. One year's results have to be read against the years before them.
  3. The balance sheet's strength is the freehold. Most of the tangible net worth is the freehold property, and the board has opened a review of what to do with the group's assets.

Ask management first

  1. The HSBC overdraft (£2.0M) and invoice finance (£2.5M) are due for renewal in October 2026. Has the renewal been agreed, on what limits, margin and covenants, and has the bank asked for any change to its security?
  2. Which covenants were breached at December 2023, by how much, and what would the same tests show on the FY2025 accounts and on the June 2026 half-year?
  3. Please provide the valuation report. What is the property worth on a vacant-possession and on a forced-sale basis, and is any part of it surplus to the operation?

4 further risks sit in the conditions register.

5 events since the accounts, under The call. Public filings only: no bank-statement, ledger or bureau data. KYC and integrity sit in a separate dossier. Every figure is read by hand from the audited accounts and the interim report. 10 of 11 figures checked across two sources agree; the one that does not is in the register. How we grade and size is set out once, for every report.

Assessment

The call

1 trigger fired: working capital cycle. The two scoring axes alone would give A; a fired covenant caps the grade at C. The grade states the risk; risk appetite decides the action, so one letter carries three.

Since the FY2025 accounts this report is built on:

  • H1 2026 interim results (25 September 2026). Revenue £11.9M (+6.7%), adjusted EBITDA £374k against £81k, profit before tax £70k against a £378k loss.
  • FY2025 dividend paid (6 July 2026). A final dividend of 3.0p per share, about £0.17M, the first since FY2022.
  • Board: three chairs in eight weeks (17 June 2026 to 10 August 2026). The chair of six years stepped down at the June AGM; his successor stepped down as chair after a month and left the board in August, with an interim chair in between; the largest shareholder, holding about 20%, is now chair.
  • Strategic and capital-allocation review announced (25 September 2026). The new chair has announced a review of 'operations, strategic priorities and capital allocation', aimed at 'unlocking the value inherent in the business', and says the market does not value the group's assets fully.
  • Bank facilities due for renewal (October 2026). The HSBC overdraft (£2M) and invoice finance (up to £2.5M) are due for renewal in October 2026 on the annual report's own statement.

None of these changes any audited figure, ratio or covenant test.

Risk appetiteLimitAction at this gradeControls required
Conservative£0.38Mmodel-implied £0.95M · ceiling $500,000 (£0.38M)
bound by policy ceiling		Approve at the conservative limit only, with the register cleared as conditions precedent.
  • Drawn against approved trade debtors only, excluding anything more than 90 days past due.
  • A deed of priority with the incumbent bank over the debts funded, before first drawing.
  • Monthly aged debtor and creditor listings.
  • Concentration cap per debtor.
Balanced · house view£0.75Mmodel-implied £1.32M · ceiling $1,000,000 (£0.75M)
bound by policy ceiling		Conditional approval at the house limit; clear the register before drawing.
  • A deed of priority with the incumbent bank, or release of its receivables charges over the debts funded.
  • Notification before any sale, charge or refinancing of the freehold property.
  • Quarterly management accounts against the conditions register.
  • Monthly aged debtor listing through the spring stock build.
Growth£1.51Mmodel-implied £1.63M · ceiling $2,000,000 (£1.51M)
bound by policy ceiling		Approve at the growth limit with the register as covenants and the named controls in place.
  • Sized as a share of the incumbent's working-capital lines at their renewal, with the receivables charges over the debts funded released.
  • Import finance against confirmed purchase orders for the seasonal build.
  • Monthly debtor ageing and quarterly stock reports.
  • The whole conditions register answered before first drawing.

Every band is bound by its policy ceiling. At the house view the working-capital path gives £1.95M and the earnings path £0.68M; the engine takes the average of the working-capital and earnings paths. Sized on the December balance sheet. At 30 June 2026 inventory was £2.0M higher and net debt £0.9M higher, so a limit set on the year end has to be checked against the monthly peak before it is agreed. Ceilings converted at 1.3252 US dollars to the pound on 25 September 2026, European Central Bank euro reference rates (GBP/USD cross). How the engine and the bands work.

Analytical approach

How the grade is reached

AxisScore (1 strongest, 4 weakest)Components
Financial risk1net debt / EBITDA 1.46 → 2; interest cover 3.51 → 2; cash conversion 1.85 → 1; TOL / TNW (after guarantees) 0.43 → 1; operating cash before the largest working-capital swing £0.93M → 1; free cash flow £2.41M → 1
Business risk2archetype trader / distributor → 3; related-party revenue 0.0% of turnover → 1; disclosure: 0 blocks of the file not available from public sources → 1

Anchor from the two axes: A. Notches applied: 0. A fired covenant caps the grade at C. Grade: C.

The axes read the latest audited year. The history behind it (a loss in FY2023; a bank covenant breach; revenue 36% below its FY2021 peak) is not scored into the letter; it is carried in the conditions register, which is where a lender acts on it.

The one covenant that caps the grade is measured on VAT-inclusive receivables; on a VAT-exclusive basis the FY2025 cycle would likely sit near or below the 90-day threshold that fired. The cap is applied as filed.

The grade is a policy action, not a credit rating. The grading method.

The company

What the business is

Tandem designs and imports bicycles and e-bikes, licensed wheeled toys, golf trolleys and home and garden products, and sells them to UK national retailers, independent dealers and online marketplaces, plus a small direct-to-consumer e-bike business (Electric Life). Production is outsourced, mainly to Asia; the group owns its Birmingham head office and an 85,000 sq ft freehold warehouse.

Archetype: trader / distributor. The company describes itself as a 'designer, developer, distributor and retailer' of sports, leisure and mobility products, with production 'outsourced primarily to Asia' and sourcing run from a Hong Kong office (AR2025 strategic report). It owns its Birmingham warehouse but not the factories. Thin margins on high throughput; little to secure against beyond the invoice.

Revenue by segmentFY2023FY2024FY2025Share FY2025Change since FY2023
Toys, sports and leisure£10.4M£12.4M£10.2M39.0%−1.6%
Bicycles, including electric£6.6M£7.4M£10.2M38.8%53.2%
Golf£2.3M£2.5M£2.8M10.6%22.3%
Home and garden£3.0M£2.3M£3.0M11.6%1.6%
Total£22.2M£24.6M£26.2M

AR2025 note 3. The company states that 'due to the integration of a number of functions across the Group it is not possible to accurately report operating segments in full', so revenue is analysed by segment and profit is not.

Over 2023 to 2025, bicycles, including electric rose from 29.8% to 38.8% of revenue and toys, sports and leisure fell from 46.6% to 39.0%. No segment profit is disclosed, so which line earns the margin, and which holds the stock, cannot be read from the accounts.

Forced pairing

Strengths and weaknesses

Strengths

  • net debt / EBITDA 1.46
  • interest cover 3.51
  • cash conversion 1.85
  • TOL / TNW (after guarantees) 0.43
  • operating cash before the largest working-capital swing £0.93M
  • free cash flow £2.41M
  • related-party revenue 0.0% of turnover

Weaknesses

  • archetype trader / distributor
  • The incumbent bank, its security and the renewal (conditions register)
  • Earnings against their own history, and a prior covenant breach (conditions register)
  • The balance sheet's strength is the freehold (conditions register)
  • The cash the facility would be repaid from (conditions register)
  • The borrowing base and the working-capital cycle (conditions register)
  • Who is running the board (conditions register)

Scored items are components of the grade; items marked as from the conditions register are the risks the register raises, which the grade does not score.

4 audited years and the half-year

Financial position

FY2022FY2023FY2024FY2025H1 2026 (6 months, unaudited)
Revenue£26.68M£22.24M£24.62M£26.15M£11.93M
Gross margin29.2%27.0%29.9%31.1%33.3%
EBITDA£1.48M−£0.46M£1.13M£1.31M£0.37M
EBITDA margin5.5%−2.1%4.6%5.0%—
Profit before tax£0.85M−£1.20M£0.03M£0.57M£0.07M
Operating cash flow£1.23M−£0.61M−£0.68M£2.42M−£0.86M
Free cash flow−£3.74M−£1.64M−£0.77M£2.41M—
Net assets£26.8M£23.8M£23.9M£26.1M£26.1M
Tangible net worth£21.3M£18.3M£18.4M£20.6M—
Borrowings£4.84M£4.01M£5.71M£3.44M£3.28M
Net debt£1.55M£3.57M£4.32M£1.90M£2.76M
Inventory£4.76M£5.16M£5.93M£4.44M£6.47M
Trade receivables£4.88M£4.39M£5.44M£4.79M—
Receivables past due26.0%17.2%26.6%41.7%—
Debtor days67728167—
Stock days9211612690—
Creditor days40415361—
Working-capital cycle11814715396—
Net debt / EBITDA1.05×—3.82×1.46×—
Interest cover9.37×−3.02×2.68×3.51×—
TOL / TNW0.43×0.48×0.60×0.43×—
Cash conversion0.83×—−0.60×1.85×—
Pension contributions£0.65M£0.60M£0.40M£0.45M—

Audited consolidated accounts, FY2022 to FY2025 (FY2022 as the FY2023 report's comparative); the interim column is the unaudited half-year and is not annualised.

For the longer view: revenue peaked at £40.9M in FY2021, with operating profit before exceptional costs of £4.94M. FY2025 revenue is 36% below that peak, and FY2023 was loss-making.

The company states that it understands market forecasts for FY2026 to be revenue of £27.7M and profit before tax of £0.8M, and that revenue to 30 August was +9.1% on the prior year. These are the company's statements, not figures we have tested.

How these figures are defined

Operating profit before exceptional costs, plus depreciation and amortisation. Exceptional costs (£0.09M in FY2025, a retirement settlement) are excluded, as in the company's own adjusted EBITDA.

Bank interest only (the company's 'underlying' finance cost, equal to interest paid). The IAS 19 pension finance cost is non-cash and is excluded from cover ratios.

Operating profit before exceptional costs over bank interest, the same basis as the company's own interest-cover measure. On EBITDA instead of operating profit, FY2025 cover is 4.73×. Neither carries principal repayment, so neither is a debt-service ratio.

Debtor days compare year-end trade receivables, which include VAT, with revenue, which excludes it. That overstates debtor days, and so the working-capital cycle, by up to a sixth on UK sales. The covenant is tested as filed; on a VAT-exclusive basis the FY2025 cycle would likely sit near or below the 90-day threshold that fired.

Total liabilities as filed, over net assets less intangible assets (goodwill).

FY2025 net profit includes a £0.28M tax credit, mostly deferred tax; profit before tax was £0.57M.

Cash flow

Where the cash came from

FY2025
Operating cash before working capital£0.79M
Movement in inventories£1.49M
Movement in trade and other receivables−£0.12M
Movement in trade and other payables£0.50M
Interest paid−£0.28M
Tax (paid) or received£0.03M
Operating cash flow£2.42M

consolidated cash-flow statement, FY2025

Operating cash flow of £2.42M in FY2025 was earned as £0.79M before working capital. The largest single contribution was a £1.49M release from inventories, 61.7% of the total; trade and other receivables absorbed £0.12M, trade and other payables released £0.50M. Without that release operating cash is still positive, at £0.93M.

In the H1 2026 interim, inventory absorbed £2.04M and operating cash was −£0.86M for the half, against £1.12M in the same half a year earlier. The half-year figure also rests on a nil movement in receivables, which the verification section questions. One year-end cash flow is not the drawing profile of a facility.

Contributions to the two closed defined benefit schemes took £0.45M of cash in FY2025, 34.3% of EBITDA, and the agreed schedule sets £0.53M for the next year, running to September 2028. The IAS 19 deficit has closed, but the contributions are set by the trustees' funding valuation, not by the accounting figure.

Funding

Existing lenders and their security

Facility (HSBC)LimitRenewalTerms
Overdraft£2.0MOctober 2026
Invoice finance£2.5MOctober 2026
Import loans£2.0M—
Term loan£3.47M drawn—Received 31 January 2024 (£3.9M); repayable at £280k a year with a £2.5M bullet in March 2029; Base Rate + 2.50%; no financial covenants.

AR2025 note 2 (going concern), note 14 (borrowings), note 15 (liquidity and interest-rate risk)

The HSBC overdraft (£2.0M) and invoice finance (£2.5M) are due for renewal in October 2026, on the annual report's own statement. No outcome has been disclosed. At the December year end invoice finance was undrawn; by 30 June net debt was £2.76M as stock rose.

At 31 December 2023 the group was in breach of the financial covenants on its HSBC loans, with no waiver received, and the loans were classified as due within one year. HSBC refinanced them on 31 January 2024 with a new £3.9M term loan that carries no financial covenants.

Interest-rate cap on £3M of borrowings, depreciating, capped at 2%.

Register of charges: outstanding
CreatedHolderTypeParticularsCompany
6 November 2000HSBC Invoice Finance (UK) LtdFixed charge on receivables and related rightsFixed equitable charge over all factored receivables which fail to vest in the security holder.Parent
12 September 2002HSBC Invoice Finance (UK) LtdFixed charge on purchased debts which fail to vestFixed equitable charge over all debts purchased under the debt purchase agreement.Parent
29 May 2003HSBC Bank plcDebentureFixed and floating charges over the undertaking and all property and assets present and future.Parent
1 February 2013HSBC Bank plcLegal mortgageFreehold property, 35 Tameside Drive, Castle Vale, Birmingham (title WM705755).Parent
9 April 2021HSBC UK Bank plcLegal chargeLand on the south side of Orton Way, Orton, Birmingham (title WM325899).Parent
9 May 2002Private individualDebentureFixed and floating charges over the undertaking and all property and assets. Part released.Trading subsidiary
9 May 2002Private individualDebentureFixed and floating charges over the undertaking and all property and assets. Part released.Trading subsidiary
29 May 2003HSBC Bank plcDebentureFixed and floating charges over the undertaking and all property and assets present and future.Trading subsidiary
4 June 2003HSBC Invoice Finance (UK) LimitedFixed charge on purchased debts which fail to vestFixed equitable charge over all debts purchased under the debt purchase agreement.Trading subsidiary
17 May 2013HSBC Bank plcChargeNotification of addition to or amendment of charge.Trading subsidiary
5 February 2016HSBC Bank plcGeneral pledgeA general pledge.Trading subsidiary

Companies House register of charges, parent and trading subsidiary

11 charges are outstanding across the parent and the trading subsidiary. 9 are held by HSBC, covering all-assets debentures, fixed charges over receivables, legal charges over the freehold property. A new lender would rank behind HSBC unless HSBC is refinanced out or agrees a deed of priority.

2 further charges are recorded as outstanding in favour of private individuals, created in 2002 over the trading subsidiary, with part of the property released and no satisfaction filed. Charges this old are often historic security that was repaid but never formally released. The register cannot show that, or how they rank, so they stay a question until a satisfaction is filed.

Recourse and revenue quality

What the balance sheet does not show

Guarantees and commitments. No guarantee is given for anyone outside the group. The one guarantee disclosed is a cross guarantee between group companies for amounts owed to HSBC, which is the same group debt already on the consolidated balance sheet, so it adds nothing to consolidated recourse. There are no capital commitments, and the IAS 19 pension deficit was £0.02M at the year end. Against £26.1M of net worth, nothing material sits off the balance sheet.

Related parties. The related-party note states there were no related-party transactions in the year or the year before, so all revenue is billed to third parties.

Supplier payment conduct. No UK statute requires the accounts to disclose balances unpaid to small suppliers. The UK's payment-practices reporting duty applies only to large companies (two of: £54M turnover, £27M balance sheet, 250 employees); group revenue is £26.2M, so no report is expected, and none was looked for. Days payable, the nearest public proxy, is read in the financials instead.

Distance to fire

Covenants, and how close each one is

Thresholds are applied at trader / distributor levels, because a figure that is alarming for one business model is unremarkable for another. They are the same thresholds used in every market. Distance to fire is stated for every covenant, including those that have not fired.

CovenantValueThresholdStatusDistance
Receivable stretch66.9090.00· okclear by 23 days
Working capital cycle96.1090.00FIREDbreached by 6 days
Leverage1.463.00· okclear by 1.54
Interest cover3.512.00· okclear by 1.51
Total outside liabilities / tangible net worth0.434.00· okclear by 3.57
Cash conversion1.850.40· okclear by 1.45
Debt / equity0.132.00· okclear by 1.87
Free cash flow2.410.00· okclear by 2.41
Investing outflow / revenue0.0310.00· okclear by 9.97
Off-balance-sheet guarantees / net worth0.000.50· okclear by 0.50
Operating cash before the largest working-capital swing0.930.00· okclear by 0.93
Revenue transacted with related parties0.0015.00· okclear by 15.00

Days for debtor days and the working-capital cycle; multiples for ratios; £M for free cash flow and operating cash; percentages for investing outflow and related-party revenue.

Debtor days compare year-end trade receivables, which include VAT, with revenue, which excludes it. That overstates debtor days, and so the working-capital cycle, by up to a sixth on UK sales. The covenant is tested as filed; on a VAT-exclusive basis the FY2025 cycle would likely sit near or below the 90-day threshold that fired.

Reconciliation

Does our arithmetic match theirs

5 of 5 agree. The company's own stated measures against the same quantities computed here from the audited statements. Where they agree, our definitions are the company's own, so a covenant drafted on either reads the same.

MeasureStated by the companyComputed hereGapResult
Adjusted EBITDA, FY20251.3061.3060.0%Agrees
Net debt, FY20251.9011.9010.0%Agrees
Gross margin, FY202531.131.090.03%Agrees
Adjusted EBITDA, FY20241.1321.1320.0%Agrees
Net debt, FY20244.3224.3220.0%Agrees

Tolerance 2.0%. Money in £M.

Verification

Is the basis what we say it is

10 of 11 corroborated. Each figure is compared across two separate sources: a note's text against the statements, a note's table against its own total, and the copy filed at Companies House against the company's published report. Agreement corroborates both; a gap past tolerance is published, never reconciled away.

QuantityFirst sourceSecond sourceGapResult
HSBC term loan£3.725Mtext of AR2025 note 14£3.470Mbalance sheet and table in the same note, FY20257.35%DISAGREESThe sentence's figure is exactly the prior year's balance, and the same sentence appears in AR2024 note 14: the note text was carried forward without updating. The balance-sheet figure is used throughout this report.
Trade receivables£4.791Mageing table, note 11£4.791Mtrade receivables line, note 110.0%Agrees

Tolerance 2.0%.

9 headline figures read from the copy filed at Companies House agree with the published annual report to the thousand.

The 9 filed-copy checks
QuantityFirst sourceSecond sourceGapResult
Revenue£26.153MCompanies House filed copy (OCR)£26.153Mcompany-published annual report0.0%Agrees
Gross profit£8.130MCompanies House filed copy (OCR)£8.130Mcompany-published annual report0.0%Agrees
Operating profit before exceptional costs£0.968MCompanies House filed copy (OCR)£0.968Mcompany-published annual report0.0%Agrees
Total assets£35.000MCompanies House filed copy (OCR)£35.000Mcompany-published annual report0.0%Agrees
Net assets£26.091MCompanies House filed copy (OCR)£26.091Mcompany-published annual report0.0%Agrees
Inventories£4.437MCompanies House filed copy (OCR)£4.437Mcompany-published annual report0.0%Agrees
Cash£1.543MCompanies House filed copy (OCR)£1.543Mcompany-published annual report0.0%Agrees
Operating cash flow£2.419MCompanies House filed copy (OCR)£2.419Mcompany-published annual report0.0%Agrees
Adjusted EBITDA£1.306MCompanies House filed copy (OCR)£1.306Mcompany-published annual report0.0%Agrees

Anomaly: Trade and other receivables, H1 2026. The H1 2026 balance sheet reports trade and other receivables of £6.494M at 30 June 2026, identical to the thousand to the audited 31 December 2025 figure, and the interim cash-flow statement shows a nil movement. Over a half-year in which revenue was £11.9M that is possible but unusual; it may be a carried-forward figure in an unaudited statement.

Board

Who runs it

DirectorRoleAppointedNote
Simon William BRAGGNon-Executive Chair17 October 2024Appointed Chair 10 August 2026; holds about 20.0% of the voting shares.
Mark Adrian TAYLORNon-Executive Director (independent)1 October 2019Interim Chair 17 July to 10 August 2026; chairs the audit and remuneration committees.
Peter Stuart KIMBERLEYChief Executive Officer8 November 2021
Gurvinder KAURChief Financial Officer and Company Secretary23 July 2024
David Richard POULTERChief Commercial Officer31 January 2025

Companies House officer register; roles from the company's announcements.

Ownership, the PSC register and the integrity checks are in the separate KYC and integrity report.

What has to be answered

Conditions register

7 risks to settle, consolidated from 15 detected conditions. Every question traces to the figure that raised it. The register is the decision; the grade is its index.

01

The incumbent bank, its security and the renewal

The risk

Every asset a lender would look to is already charged, and the incumbent's working-capital lines are up for renewal. The overdraft and invoice finance renew imminently with no outcome disclosed. A renewal on the same terms, a reduction and a refinancing each change what a new facility would be sitting alongside. The incumbent holds all-assets debentures, fixed charges over the receivables and legal charges over the freehold property, so a new lender ranks second on everything unless the incumbent is refinanced or signs a deed of priority. Charges in favour of private individuals remain on the register as outstanding. Until satisfactions are filed they are security that ranks ahead of any new charge on the face of the register.

Ask management

The HSBC overdraft (£2.0M) and invoice finance (£2.5M) are due for renewal in October 2026. Has the renewal been agreed, on what limits, margin and covenants, and has the bank asked for any change to its security?

  • What does each HSBC charge secure today, and would HSBC agree a deed of priority over receivables funded by another lender, or release its receivables charges on a refinancing?
  • Were the debts secured by the 2002 debentures in favour of the two private individuals repaid, and will the company file satisfactions (form MR04) to clear them from the register?
Evidence: 3 detected conditions
  • annual report, liquidity risk note The HSBC overdraft (£2.0M) and invoice finance (£2.5M) are due for renewal in October 2026, on the annual report's own statement.
  • Companies House register of charges 11 charges are outstanding across the parent and the trading subsidiary. 9 are held by HSBC, covering all-assets debentures, fixed charges over receivables, legal charges over the freehold property.
  • Companies House register of charges 2 further charges are recorded as outstanding in favour of private individuals, created in 2002 over the trading subsidiary, with part of the property released and no satisfaction filed.
02

Earnings against their own history, and a prior covenant breach

The risk

One year's results have to be read against the years before them. An earlier annual report discloses a breach of the financial covenants on the bank loans with no waiver received, so covenant headroom is not a theoretical question for this borrower. Revenue and operating profit remain far below the five-year peak, with a loss-making year inside the window, so one good year is not yet a trend.

Ask management

Which covenants were breached at December 2023, by how much, and what would the same tests show on the FY2025 accounts and on the June 2026 half-year?

  • What in the FY2025 recovery is durable, and what was weather, clearance or one-off? Please provide the FY2026 budget with the monthly phasing of revenue, stock and borrowing.
Evidence: 2 detected conditions
  • FY2023 annual report, borrowings note At 31 December 2023 the group was in breach of the financial covenants on its HSBC loans, with no waiver received, and the loans were classified as due within one year.
  • five-year history, annual report Revenue of £26.2M in FY2025 is 36% below the FY2021 peak of £40.9M, and operating profit before exceptional costs of £0.97M compares with £4.94M then.
03

The balance sheet's strength is the freehold

The risk

Most of the tangible net worth is the freehold property, and the board has opened a review of what to do with the group's assets. Strip out the freehold and the tangible net worth that backs the trading business is a fraction of the headline, and the latest increase in net assets came mostly from revaluing it. A capital-allocation review aimed at 'unlocking value' could mean a sale, a sale and leaseback or a refinancing of the property, any of which changes the collateral a lender would rely on.

Ask management

Please provide the valuation report. What is the property worth on a vacant-possession and on a forced-sale basis, and is any part of it surplus to the operation?

  • Does the review contemplate selling, leasing back or refinancing the freehold property, a return of capital, or an acquisition? Over what timetable?
Evidence: 2 detected conditions
  • balance sheet and property note The freehold property is carried at £15.93M (Jones Lang LaSalle Limited, January 2026), 77% of tangible net worth of £20.63M.
  • H1 2026 interim report, chairman's statement 25 September 2026: "Over the coming months, the Board will undertake a review of the Group's operations, strategic priorities and capital allocation, with a particular focus on the initiatives most capable of driving sustainable sales growth, improving profitability…
04

The cash the facility would be repaid from

The risk

Reported operating cash overstates what is available to service a facility through the year. Stock and borrowing at the half-year were materially above the year end, so the year-end position is not the facility's drawing profile. A fixed schedule of contributions to two closed pension schemes takes a large share of EBITDA in cash each year, ahead of any lender.

Ask management

What is the peak monthly borrowing requirement across the year, in which month, and how much headroom does the incumbent's renewal leave at that peak?

  • When is the next triennial funding valuation, what does the trustees' current estimate show, and can the schedule be reduced now the IAS 19 deficit has closed?
Evidence: 2 detected conditions
  • H1 2026 interim report (unaudited) At 30 June 2026 net debt was £2.76M against £1.90M at the year end, inventory £6.47M against £4.44M, and operating cash for the half was −£0.86M.
  • pension note, annual report Contributions to the two closed defined benefit schemes took £0.45M of cash in FY2025, 34.3% of EBITDA, and the agreed schedule sets £0.53M for the next year, running to September 2028.
05

The borrowing base and the working-capital cycle

The risk

A receivables facility is only as good as the debts behind it. A rising share of trade receivables is past due, and past-due debts are the first to be excluded from a borrowing base. The working-capital cycle is longer than the threshold for a distributor, so the gap between paying for stock and being paid for it has to be funded.

Ask management

Which debtors make up the past-due balance, how much has since been collected, and are any on extended terms or in dispute?

  • The working-capital cycle is 96.1 days against 90. How much of it is the spring stock build, and what does the cycle look like at the June peak rather than the December low?
Evidence: 2 detected conditions
  • covenant Working capital cycle: 96.1 against 90 (breached by 6 days).
  • trade receivables ageing, note 11 41.7% of trade receivables were past due at 31 December 2025 (£2.00M of £4.79M), against 26.6% a year earlier.
06

Who is running the board

The risk

The board has changed repeatedly in the last twelve months. Board oversight of management is thinner than at the last annual report, with fewer independent directors.

Ask management

What led to the changes of chair, and when will the additional independent non-executive director be appointed?

Evidence: 1 detected condition
  • Companies House officers; regulatory announcements 17 June 2026: Stephen James Grant stepped down as Chair and director at the AGM, after 21 years on the board (the Companies House register records his resignation on 16 June 2026). 17 June 2026: Jonathan Crookall became Chair. 17 July 2026: Jonathan Crookall…
07

What the documents state two ways, or leave out

The risk

Parts of the file are stated inconsistently or are missing from the public record. A figure in a note's text does not agree with the statements it sits under. A balance in the unaudited interim has not moved to the thousand over a half-year. The copy of the latest accounts on the public register is incomplete.

Ask management

Note 14 says the HSBC loan is £3.725M; the balance sheet and the note's own table give £3.470M. Please confirm the balance at 31 December 2025 and the current amortisation schedule.

  • Please confirm trade and other receivables at 30 June 2026, with the aged debtor listing at that date. The interim reports the same £6.494M as at 31 December 2025, with no movement.
  • Was the full set of accounts delivered to Companies House? If the register copy is incomplete, will the company ask for it to be corrected?
Evidence: 3 detected conditions
  • basis corroboration HSBC term loan: £3.725M in the text of AR2025 note 14 against £3.470M in the balance sheet and table in the same note, FY2025.
  • interim report (unaudited) The H1 2026 balance sheet reports trade and other receivables of £6.494M at 30 June 2026, identical to the thousand to the audited 31 December 2025 figure, and the interim cash-flow statement shows a nil movement.
  • Companies House filing history The FY2025 group accounts image on the public register is 35 pages against a 72-page annual report.
What we did not use

Basis of this report

This report runs on public, third-party data only. First-party data from bank statements, the sales and purchase ledgers and the credit bureau is required for our network model, which maps a borrower's customers, suppliers and related parties, and lets us provide further intelligence on the borrower: actual utilisation of the incumbent lines, the peak borrowing requirement through the year, and the named counterparties a facility would be exposed to. Set against this specific report, here is what first-party data would have resolved.

SectionWhat first-party data would have closed
Business modelA management-supplied customer list would confirm whether the concentration implied by the archetype is real for this borrower, and at what counterparty.
CovenantsBank-statement data adds behavioural triggers, such as bounced payments and covenant-relevant balance drops, which move weeks before any published ratio does.
VerificationThe facility letters and the trial balance settle any figure the published documents state two ways.
What the business isManagement accounts by product line show gross margin and stock holding per segment, which is what decides how much of the borrowing base each line can support.
Guarantees and commitmentsA bureau report lists every live facility and guarantee across the group, including any given by a director personally, which no note discloses.
Related partiesA sales ledger by counterparty confirms this month by month and shows customer concentration, which the note does not.
Where the cash came fromMonthly management accounts and bank statements show the working-capital cycle month by month, which is the shape a facility actually draws against.
Register of chargesThe facility letters and any deed of priority show the limits each charge secures and how they rank, which the register does not state.
Existing facilitiesBank statements and the facility letters show actual utilisation through the year, the headroom at the seasonal peak and the renewal terms on offer.
BoardBoard minutes and the nominated adviser's view of board composition, which AIM requires it to keep under review.
Facility sizingMonthly management accounts and bank statements give the working-capital path at the seasonal peak rather than the year-end low, and actual utilisation of the incumbent lines.
Conditions registerBank statements, the facility letters and monthly management accounts answer several of these without asking the borrower, and date the answer.
FeedWhat it adds
Monthly management accountsthe working-capital cycle and borrowing month by month, including the peak, not only the year end
Sales and purchase ledgersnamed customers and suppliers, their shares, and concentration limits
Facility letters and bank statementsincumbent limits, utilisation, renewal terms and what each charge secures
Credit bureaurepayment behaviour of the group and personal credit of the directors
Network modelcustomer, supplier and related-party network from ledger and bank data; concentration and contagion risk across it