Company Number: 13485012

Analysis Date: 2025-07-19 12:45 UTC

1. Risk Rating: HIGH

The company exhibits a high level of financial risk primarily due to significant net current liabilities and very limited liquidity relative to current liabilities. The sizeable bank loan and ongoing negative working capital position raise concerns about the company’s ability to meet short-term obligations without external support.

2. Key Concerns:

• Negative Net Current Assets: The company’s net current liabilities of approximately £327k at 30 June 2024 indicate insufficient current assets to cover short-term debts, increasing liquidity risk.
• Reliance on Substantial Long-term Debt: The £422k bank loan represents a significant leverage burden relative to the company’s small equity base of £14k, potentially straining cash flows.
• Limited Cash Reserves: Cash on hand is only £10.5k, a very low buffer against immediate liabilities and operational costs, suggesting potential cash flow constraints.

3. Positive Indicators:

• Asset Backing in Investment Property: The company holds investment properties valued at £763k, which provides tangible asset coverage that exceeds liabilities when considering total assets less current liabilities.
• No Overdue Filings: Accounts and confirmation statements are filed on time with no overdue returns, indicating compliance with statutory requirements.
• Continuity of Management: Despite one director’s recent resignation, the company maintains an active director with full shareholding control, indicating stable governance.

4. Due Diligence Notes:

• Verify the terms and repayment schedule of the £422k bank loan to assess refinancing risk and debt servicing capacity.
• Assess cash flow statements and rental income streams to determine operational cash generation and sustainability.
• Investigate the valuation approach and liquidity of investment properties in the current market to confirm realizable asset value.
• Review any contingent liabilities or off-balance-sheet obligations not reflected in the accounts.
• Consider director and shareholder support arrangements given the small equity base and current liquidity shortfall.