Company Number: 13041030

Analysis Date: 2025-07-29 14:26 UTC

1. Risk Rating: MEDIUM
   The company shows a stable asset base with investment properties appreciating in value; however, significant current liabilities exceeding current assets indicate liquidity pressure. The reliance on directors' loans and bank loans suggests leverage risk, mitigated somewhat by positive net assets.

2. Key Concerns:

• Liquidity Deficit: Current liabilities (£135,175) far exceed current assets (£2,830), resulting in a negative net current asset position (-£63,474), signaling potential cash flow constraints.
• High Leverage: Substantial long-term bank loans (£135,175) relative to net assets (£16,212) imply financial risk, especially if rental income or property values decline.
• Going Concern Uncertainty: Directors’ note highlights material uncertainties about the company’s ability to continue as a going concern, warranting close scrutiny.

3. Positive Indicators:

• Asset Growth: Fixed assets (investment properties) increased from £200,928 in 2022 to £225,000 in 2023, reflecting successful revaluation and potential capital appreciation.
• Stable Shareholder Control: Directors and significant shareholders are aligned, with no recent changes in control or director status, supporting stable governance.
• Filing Compliance: All accounts and confirmation statements are filed on time, indicating good regulatory compliance and governance practices.

4. Due Diligence Notes:

• Review detailed cash flow statements and income generated from property management to assess operational cash inflows versus liabilities.
• Investigate the terms and conditions of directors' loans and bank loans, including repayment schedules and covenants.
• Clarify the nature of the going concern uncertainties mentioned by directors, including any contingent liabilities or expected future cash requirements.
• Examine rental contracts and occupancy rates for the investment properties to evaluate revenue stability and risks.
• Confirm whether the deferred tax asset (£2,775) is fully realizable given the company’s profitability outlook.