Company Number: 13113093

Analysis Date: 2025-07-20 11:22 UTC

1. Risk Rating: HIGH

Justification: The company has been trading since 2021 and shows a pattern of negative net assets and net current liabilities in its initial years, indicating persistent losses and liquidity problems. Although the latest accounts (year ending 31 January 2024) show a small positive net asset position (£161) and improved net current assets (-£1,338, significantly better than prior years), the cash balance has dropped considerably from £4,206 in 2023 to £1,493 in 2024. Current liabilities remain relatively high, and the company relies on director loans for financing. These factors combined suggest ongoing solvency and liquidity risks.

2. Key Concerns:

• Persistent Negative Net Assets and Working Capital Deficits: For two consecutive years (2022 and 2023), the company reported substantial negative shareholders’ funds (approx. -£30,000) and large working capital deficits, which raises concerns about its ability to meet short-term obligations.
• Low and Declining Cash Reserves: Cash holdings declined by approximately 65% in the latest year, from £4,206 to £1,493, which may indicate cash flow stress.
• Dependence on Director Loans: Significant loans from directors (£5,195 each) appear on the balance sheet, which may be essential to maintain operations but also indicate limited external financing options and potential governance risks.

3. Positive Indicators:

• Recent Small Positive Net Asset Position: The 2024 accounts show a turnaround to a positive net worth (£161), suggesting some improvement in financial health.
• Reduction in Current Liabilities: Current liabilities have decreased from £44,659 in 2023 to £36,310 in 2024, indicating efforts to manage short-term debts.
• No Overdue Filings or Compliance Issues: The company’s accounts and confirmation statement filings are up-to-date, reducing regulatory risk.

4. Due Diligence Notes:

• Investigate the reasons behind the significant historical losses and what measures management has taken to improve profitability and liquidity.
• Review detailed cash flow statements to assess operating cash flows and financing activities to understand how cash is generated and used.
• Assess the terms and conditions of director loans, their repayment schedules, and any related party transaction disclosures.
• Confirm the sustainability of the business model in the construction installation sector (SIC 43290) and client concentration.
• Verify the status and impact of the recent director resignation on governance and control.