Company Number: 13324620

Analysis Date: 2025-07-20 12:31 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity risks evidenced by persistent and large net current liabilities, limited cash reserves, and reliance on non-interest bearing loans from related parties.

2. Key Concerns:

• Negative Working Capital: The company consistently reports net current liabilities exceeding £420k, indicating an inability to cover short-term obligations with current assets.
• High Related Party Debt: Outstanding loans from a related company amounting to £351,584 as of the latest accounts, with no interest charged, potentially masking underlying cash flow challenges.
• Limited Operational Activity: Minimal current assets aside from cash, no reported debtors, and only one employee suggest limited ongoing trading or revenue generation, raising concerns about operational sustainability.

3. Positive Indicators:

• Substantial Fixed Assets: The company holds investment property valued at £429,436, providing a significant asset base that could potentially be leveraged or sold to improve liquidity.
• No Overdue Filings: The company is compliant with filing deadlines for accounts and confirmation statements, indicating good regulatory adherence.
• Sole Director Control: The single director and sole shareholder structure (75-100% control) may allow for streamlined decision-making and strategic flexibility.

4. Due Diligence Notes:

• Investigate Loan Terms: Clarify the nature and repayment terms of the £351,584 related party loan, including any plans for repayment or conversion to equity.
• Cash Flow Projections: Request detailed cash flow forecasts and operational plans to assess how the company intends to manage its liquidity gap and sustain operations.
• Valuation and Marketability of Investment Property: Obtain an independent valuation and review market conditions for the investment property to understand its liquidity and potential to support solvency.
• Revenue and Profitability Data: Seek access to the company's income statement or management accounts since the statutory accounts do not include profit and loss details, to evaluate operational performance.
• Director’s Plans: Understand the director’s strategy regarding the negative working capital and overall business viability.