Company Number: 13043643

Analysis Date: 2025-07-29 14:16 UTC

1. Risk Rating: HIGH

Justification: The company exhibits a significant negative net asset position and a large imbalance between current liabilities and current assets, indicating solvency and liquidity concerns. The negative shareholders’ funds have more than doubled from £-374k in 2022 to £-813k in 2023, reflecting deteriorating financial health. The current liabilities vastly exceed current assets (2023: £1.68m vs. £2.2k), suggesting severe liquidity constraints.

2. Key Concerns:

• Solvency Risk: Net assets are deeply negative at £-812,597, driven by long-term creditors far exceeding total assets, posing a risk to the company’s ability to meet obligations.
• Liquidity Concerns: Current liabilities (£1.676m) overwhelmingly surpass current assets (£2.2k), resulting in negative net working capital, which is a strong indicator of cash flow difficulties.
• Operational Stability: Despite holding fixed assets valued at £895,000, the company’s persistent and growing losses reflected in shareholders’ deficit raise serious questions about the sustainability of the business model and operational cash generation.

3. Positive Indicators:

• The company is current on filings with no overdue accounts or confirmation statements, demonstrating compliance with statutory requirements.
• The business has maintained its principal activity consistently as property management and letting, with a small stable workforce of two employees.
• The increase in fixed assets from £615,000 to £895,000 may indicate investment in property, which could be leveraged for future stability if effectively managed.

4. Due Diligence Notes:

• Investigate the nature and terms of the significant long-term liabilities (£1.676m) to understand creditor composition, repayment schedules, and potential restructuring.
• Assess cash flow statements and operational cash generation capacity beyond balance sheet snapshots to evaluate short-term liquidity management.
• Review directors’ commentary or strategic reports (if available) for plans addressing the negative equity and whether additional capital injections or asset sales are anticipated.
• Confirm the valuation methodology and marketability of fixed assets, as overvaluation could mask underlying financial risks.
• Examine related party transactions or loans that may impact financial stability or governance.