AHMED SPICE GRIMSBY LTD

Executive Summary

AHMED SPICE GRIMSBY LTD is a recently incorporated licensed restaurant company showing significant financial distress with worsening negative net assets and heavy reliance on director loans. While regulatory compliance is maintained, the company’s liquidity and solvency position pose high risks to operational sustainability. Further detailed financial and operational due diligence is recommended before considering investment.

AHMED SPICE GRIMSBY LTD - Analysis Report

Company Number: 14250288

Analysis Date: 2025-07-29 20:42 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns, with net current liabilities and net assets deeply negative and worsening year-on-year. The high level of director loans as short-term creditors further complicates the financial stability.

2. Key Concerns:

• Severe Negative Net Assets and Working Capital: Net assets deteriorated from -£5,002 in 2023 to -£30,248 in 2024; net current liabilities worsened from -£35,002 to -£54,248, indicating inability to cover short-term obligations with current assets.
• High Reliance on Director Loans: £29,945 of current liabilities in 2024 are loans from directors, signifying dependence on insider funding to meet liabilities, which may not be sustainable or secure.
• Loss Accumulation and Operational Sustainability: The retained losses have increased substantially, and the company reported no profits, raising concerns about ongoing operational viability in the licensed restaurant sector, a high-risk industry especially for a young company incorporated in 2022.

3. Positive Indicators:

• Compliance and Timely Filings: The company is current with its accounts and confirmation statement filings, demonstrating regulatory compliance and governance diligence.
• Stable Employee Base: Maintains a consistent average of 4 employees, suggesting some operational continuity.
• Tangible Fixed Assets Presence: Possession of £24,000 in net tangible assets (plant and machinery) provides some collateral value.

4. Due Diligence Notes:

• Investigate the terms and repayment schedules of director loans to assess risk of calls or withdrawals.
• Review cash flow statements and management accounts to understand liquidity management and revenue generation, since cash on hand is minimal (£550).
• Understand the business model and market positioning in the licensed restaurant sector to evaluate prospects for turnaround or growth.
• Assess any contingent liabilities or related party transactions not disclosed in the accounts.
• Confirm no outstanding regulatory or legal issues given the company’s recent formation and financial losses.