ARG PROJECTS LTD

Executive Summary

ARG Projects Ltd shows significant financial distress evidenced by negative net assets and a large liquidity gap, despite holding substantial investment property assets securing long-term debt. The company’s high borrowings and current liabilities relative to cash and receivables present solvency and liquidity risks. Independent valuation of assets and further analysis of cash flow and related party loans are recommended to fully assess financial stability.

ARG PROJECTS LTD - Analysis Report

Company Number: 13143990

Analysis Date: 2025-07-20 17:20 UTC

1. Risk Rating: HIGH

The company exhibits a high risk profile primarily due to its negative net assets position and significant current liabilities that vastly exceed current assets, indicating solvency and liquidity concerns.

2. Key Concerns:

• Negative Shareholders’ Funds: The company has a shareholders’ deficit of £1,674 as at 31 January 2024, although this is an improvement from prior years. Persistent negative equity suggests accumulated losses and potential solvency issues.

• Poor Liquidity Position: Net current liabilities stood at £107,629 with cash at only £2,805. Current liabilities of £119,838 vastly exceed current assets of £12,209, indicating potential difficulty meeting short-term obligations.

• High Long-Term Debt: The company carries substantial long-term borrowings of £400,280, secured by investment properties. While these are interest-only mortgages with long maturities, the large debt burden relative to net assets and cash flow raises concerns about financial stability and servicing capacity.

3. Positive Indicators:

• Asset Base in Investment Property: Fixed assets primarily comprise investment properties valued at £509,561, which represent tangible collateral securing borrowings.

• Loan Terms: The bank loans are interest-only with long maturities (final instalments due around 2046-2048) and relatively moderate interest rates (3.24% to 4.89%), providing some breathing room on cash outflows.

• Single Director with Significant Control: The director, Mr. Anthony Roland Gilbody, holds 75-100% ownership and voting rights, implying clear decision-making authority and alignment of control.

4. Due Diligence Notes:

• Valuation of Investment Properties: The investment property values are director-assessed without an independent valuation. Verification of fair values by a qualified external valuer is critical due to their materiality.

• Cash Flow and Debt Servicing: Detailed examination of cash flow statements and forecasts to assess the company’s ability to meet interest payments and short-term liabilities is needed.

• Related Party Loans: The director has made interest-free loans repayable on demand totaling £119,838 included in current liabilities. Clarify terms, repayment likelihood, and impact on liquidity.

• Going Concern Assessment: The accounts claim going concern basis; further scrutiny of management’s plans to address negative equity and liquidity pressures is advisable.

• Compliance and Filing Status: No overdue filings noted. Confirm ongoing compliance and monitor for any late submissions or regulatory issues.

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