ALPHA DEVELOPMENT GROUP LTD

Executive Summary

Alpha Development Group Ltd is currently solvent but shows emerging financial stress with a net liabilities position in 2023 driven by losses and high non-current debt with potentially onerous interest costs. While liquidity remains supported by positive net current assets and regulatory compliance is satisfactory, the company faces medium risk primarily due to debt servicing and related-party receivable concentrations. Further due diligence on loan terms and receivables quality is recommended to clarify ongoing viability.

ALPHA DEVELOPMENT GROUP LTD - Analysis Report

Company Number: 13007389

Analysis Date: 2025-07-20 14:21 UTC

1. Risk Rating: MEDIUM
   The company shows a material net liabilities position as of 31 December 2023 (£-177,707) compared to positive net assets in 2022 (£78,148). This deterioration signals solvency pressure. However, there are no overdue filings, the company is active, and directors affirm going concern status, mitigating immediate high risk concerns.

2. Key Concerns:

• Negative Net Assets: The company moved from net assets of £78k in 2022 to net liabilities of £178k in 2023, indicating losses have eroded equity and potentially weakening solvency.
• High Non-Current Financial Liabilities: The £1.74m loan notes due in 2028 with an 8% monthly interest rate represent a substantial debt obligation carrying a very high interest cost, which could pressure cash flows and long-term viability if not managed prudently.
• Receivables Concentration: Debtors of £1.57m are predominantly amounts owed by related parties (subsidiaries), which may present collection risk and liquidity concerns if these related entities face financial difficulty.

3. Positive Indicators:

• Current Assets Exceed Current Liabilities Significantly: Net current assets stand at £1.53m, suggesting short-term liquidity remains adequate.
• No Overdue Filings or Compliance Issues: Accounts and confirmation statements are filed timely with no penalties, indicating sound governance and regulatory compliance.
• Experienced Board and Clear Ownership: Multiple directors with defined roles and a clear controlling shareholder owning 50-75% of shares suggest stable governance structure.

4. Due Diligence Notes:

• Review the terms and sustainability of the loan notes incurring 8% monthly interest—confirm if this is correctly stated or a typographical error, as 8% per month is unusually high and would severely impact cash flow.
• Assess the collectability and ageing profile of the related-party debtors to evaluate liquidity risk and the financial health of subsidiaries.
• Investigate the drivers behind the 2023 losses eroding net assets, including operational performance and any exceptional items.
• Confirm if any contingent liabilities or off-balance sheet risks exist that might exacerbate solvency concerns.
• Verify the completeness and accuracy of financial statements, given exemption from audit and reliance on unaudited accounts.