Company Number: 13879121

Analysis Date: 2025-07-20 13:42 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency risk due to negative net assets and a substantial excess of current liabilities over current assets. The large creditor balance owed to group undertakings suggests intercompany financing reliance, which may mask liquidity stress. The notable decrease in investment property value further impacts financial stability.

2. Key Concerns:

• Negative net assets of £3.2 million as at 31 December 2023, down from positive equity of £704k in 2022, indicating erosion of shareholder value and solvency concerns.
• Current liabilities (£24.57 million) vastly exceed current assets (£1.7 million), resulting in a net current liability position of -£22.87 million, raising liquidity and short-term payment ability issues.
• Significant amount owed to group undertakings (£23.3 million) classified as short-term creditors; dependence on related parties for funding may not be sustainable or reflect normal commercial terms.

3. Positive Indicators:

• The company holds substantial investment property assets (£19.7 million), which underpin the business’s core operations in real estate letting and may offer value recovery potential.
• No overdue filings or compliance issues noted; all statutory accounts and confirmation statements are up to date, reflecting good governance adherence.
• Directors express a going concern stance, supported by accounting policies and fair value measurement of investment property, demonstrating management’s confidence in ongoing operations.

4. Due Diligence Notes:

• Investigate the nature and terms of the intercompany liabilities to assess repayment obligations, interest terms, and the financial health of the group entities involved.
• Review cash flow forecasts and liquidity management plans to confirm the company’s ability to meet short-term liabilities despite negative working capital.
• Obtain external valuation reports or market data on investment property to verify carrying amounts and potential for asset value recovery.
• Examine directors’ assessment of going concern in light of financial trends and the extent of reliance on group funding.
• Assess any contingent liabilities or off-balance sheet commitments that may exacerbate financial risks.