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.