Company Number: 12597625

Analysis Date: 2025-07-20 16:07 UTC

1. Risk Rating: HIGH
   The company exhibits a concerning financial position with negative net assets as at 31 May 2024, indicating solvency risk. Net current liabilities have increased year-on-year, and the company reported a loss in the latest period despite turnover growth, suggesting liquidity and operational challenges.

2. Key Concerns:

• Negative Net Assets: The balance sheet shows net liabilities of £6,685 as of 2024, a deterioration from a positive net asset position in prior years, indicating potential solvency issues.
• Persistent Working Capital Deficit: Current liabilities exceed current assets by £29,026, raising liquidity concerns about meeting short-term obligations.
• Operating Loss Despite Revenue Growth: The company generated a small loss (£5,341) in 2024 despite turnover increasing by approximately 30%, indicating margins are under pressure and operational stability may be fragile.

3. Positive Indicators:

• Increasing Turnover: The company’s revenue has grown from £148k in 2020 to over £510k in 2024, showing business expansion and market traction.
• Timely Compliance: No overdue filings for accounts or confirmation statements, demonstrating good regulatory compliance and governance practices.
• Stable Management: The sole director has been in place since incorporation with no reported disqualifications, suggesting continuity in leadership.

4. Due Diligence Notes:

• Investigate Cash Flow and Creditors: Examine detailed cash flow statements and creditor aging to assess liquidity strain and payment practices.
• Review Cost Structure and Profitability Drivers: Analyze why increased turnover is not translating into profits, focusing on cost of materials and other charges that increased substantially.
• Capital Structure and Funding: Clarify the extent of external financing, shareholder support, or plans to recapitalize given the negative equity position.
• Business Model Sustainability: Understand the equestrian wholesale market dynamics and competitive positioning to assess longer-term viability.