Company Number: 12816866

Analysis Date: 2025-07-19 12:42 UTC

1. Risk Rating: MEDIUM

The company shows a moderately risky financial profile primarily due to its negative net current assets and significant long-term liabilities relative to its total assets. However, it maintains active status with timely filings and has a tangible asset base backing liabilities, which mitigates this risk somewhat.

2. Key Concerns:

• Liquidity risk is evident as current liabilities (£15,649) exceed current assets (£3,704) resulting in negative net current assets of £(11,945) for 2024, which may constrain the company’s ability to meet short-term obligations.
• The company carries substantial long-term debt (£207,829), including a secured loan of approximately £82,829 with Kent Reliance. This level of gearing relative to net assets (£15,397) could pressure solvency if cash flows weaken.
• Related party transactions with a director loan account balance of ~£140k, interest-free, raise governance and operational sustainability questions, especially as no interest is charged and the loan is sizable compared to equity.

3. Positive Indicators:

• The company holds significant fixed assets (£239,778), mainly property, which provides collateral value supporting its borrowing.
• Shareholders’ funds have increased from negative in earlier years to positive £15,397 in 2024, indicating some recovery in equity position.
• The company is compliant with filing requirements, with no overdue accounts or confirmation statements, suggesting adequate governance on statutory matters.
• The property asset valuation has appreciated modestly (£7,000 increase), supporting asset backing.

4. Due Diligence Notes:

• Verify the nature, terms, and repayment plans of the £125,000 "other creditors" falling due after more than one year to assess the risk profile and potential impact on cash flows.
• Investigate the director loan account details, including repayment terms, potential conflicts of interest, and whether the lack of interest is sustainable or could impair financial health.
• Confirm the accuracy and basis of the property valuations conducted by non-professional valuers to assess asset reliability and possible impairment risks.
• Review cash flow forecasts and rent roll or income streams from letting activities to evaluate operational sustainability and ability to service debt.
• Assess any contingent liabilities or provisions (noted as £4,607 in 2024) for potential financial impact.