ARO PROPERTY DEVELOPMENT LIMITED

Executive Summary

ARO Property Development Limited is currently facing high financial risk primarily due to persistent negative net assets and worsening liquidity positions, compounded by a sharp rise in borrowings. While the company has expanded its investment property base and maintains regulatory compliance, these positives do not offset concerns about its ability to meet obligations and sustain operations without further capital or improved cash flow. Further due diligence on asset valuations, debt terms, and operational viability is recommended before considering investment.

ARO PROPERTY DEVELOPMENT LIMITED - Analysis Report

Company Number: 12676577

Analysis Date: 2025-07-20 17:57 UTC

1. Risk Rating: HIGH
   The company demonstrates significant solvency and liquidity risks, as evidenced by persistent net current liabilities and negative net assets despite asset growth. The sizeable increase in borrowings further raises concerns about long-term financial sustainability.

2. Key Concerns:

• Negative Net Assets: The company reported negative net assets (£-18,556 at 2024 year-end), indicating shareholders’ deficit and potential insolvency risks.
• Working Capital Deficiency: Net current liabilities have increased from £-214,497 in 2023 to £-329,760 in 2024, signaling ongoing liquidity strain and potential difficulty meeting short-term obligations.
• Rising Borrowings: Non-current bank borrowings more than doubled from £127,263 to £294,393 within one year, increasing financial leverage and interest burden.

3. Positive Indicators:

• Asset Growth: Investment property value nearly doubled from £323,592 to £604,565, showing expansion of fixed assets that may enhance future income potential.
• Timely Filings: The company’s accounts and confirmation statements are up to date with no overdue filings, reflecting compliance with statutory requirements.
• Single Shareholder Control: The director owns 75-100% of shares, which may facilitate decisive governance and strategic decisions.

4. Due Diligence Notes:

• Verify the valuation methodology for investment properties, given these were director valuations without independent appraisal.
• Review loan covenants and repayment terms on bank borrowings to assess refinancing risk and potential triggers for default.
• Examine cash flow projections and operational plans to understand how the company intends to address recurring working capital deficits.
• Investigate the absence of profit and loss account disclosure for insights into profitability and operational performance.
• Assess the director’s capacity to manage the company effectively given their primary occupation is physiotherapy, which may raise questions about operational oversight.