Company Number: 12604018

Analysis Date: 2025-07-20 13:12 UTC

1. Risk Rating: HIGH
   The company shows persistent net liabilities and negative shareholders' funds, with net current liabilities indicating a working capital deficit. The large bank loan payable after more than one year relative to total assets raises solvency concerns.

2. Key Concerns:

• Negative net assets of approximately £3,300 for the last three years suggest sustained losses or inadequate capitalization.
• Net current liabilities of around £33,000 indicate insufficient short-term liquidity to meet current obligations.
• Significant long-term bank loans (£83,740) exceed total assets less current liabilities (£80,448), potentially threatening solvency if cash flows do not improve.

3. Positive Indicators:

• The company holds investment property valued at £113,300, a tangible asset that supports balance sheet strength.
• Directors appear engaged, with no indications of disqualification or governance issues.
• Up-to-date filings (accounts and confirmation statement) show regulatory compliance and timely reporting.

4. Due Diligence Notes:

• Investigate the nature and terms of the bank loans to assess repayment schedules, interest obligations, and any covenants or security interests.
• Review cash flow statements or management accounts to understand operational cash generation and ability to service debt.
• Clarify why the company retains the “Construction” name despite primary SIC codes indicating real estate trading and letting activities.
• Examine any related party transactions, particularly directors’ current accounts which form a significant part of current liabilities.
• Assess potential impairment or fair value adjustments of the investment property, and confirm its liquidity in case of asset sales.