Company Number: 12537166

Analysis Date: 2025-07-29 16:55 UTC

1. Risk Rating: MEDIUM

The company shows some solvency stress indicated by a significant decline in net assets from £522,312 in 2023 to £94,177 in 2024 and a material deficit in retained earnings. There are also increased long-term liabilities and related party debts, which raise concerns about financial stability. However, it remains a going concern with positive net current assets and no overdue filings.

2. Key Concerns:

• Decline in Net Assets and Retained Earnings: A reduction from over £522k to £94k net assets and a retained earnings deficit of £107,858 for the year suggests operational losses or large dividend payouts affecting capital.
• High Long-Term Creditors and Related Party Debt: Introduction of £299,846 in long-term hire purchase contracts and £191,646 owed to group undertakings in 2024 significantly increased liabilities compared to zero prior year long-term liabilities.
• Substantial Dividend Payments: Dividends totaling £492,634 paid to holding companies in the year are substantial relative to net assets and may have strained the company’s financial position.

3. Positive Indicators:

• Current Assets Exceed Current Liabilities: Net current assets remain positive (£216,734), indicating short-term liquidity adequacy.
• No Overdue Filings or Compliance Issues: All accounts and confirmation statements are filed on time with no penalties or regulatory concerns noted.
• Growing Asset Base: Tangible fixed assets nearly doubled to £198,826, indicating investment in operational capacity.

4. Due Diligence Notes:

• Investigate the nature and terms of related party loans and intercompany balances to assess repayment risk and financial interdependence.
• Review the rationale and sustainability of dividend policy given recent losses and capital erosion.
• Examine cash flow statements to determine operating cash generation and ability to service increasing hire purchase liabilities.
• Confirm if there are any contingent liabilities or off-balance sheet risks related to contracts or litigation in the construction sector.
• Assess management plans addressing the sharp decline in net assets and measures to restore profitability.