Company Number: 13620798

Analysis Date: 2025-07-29 18:12 UTC

1. Risk Rating: HIGH
   The company demonstrates significant solvency and liquidity risks. Despite a recent improvement in net assets, current liabilities still substantially exceed current assets, indicating ongoing working capital pressures.

2. Key Concerns:

• Negative Working Capital: The company’s net current assets remain deeply negative at £(10,356) as of 2024, which signals an inability to cover short-term liabilities with short-term assets. This worsens operational liquidity risk.
• Director Loans Dominance: A large portion of current liabilities (£9,168 in 2024) consists of loans from directors, raising concerns about financial stability and reliance on insider funding that may not be sustainable.
• Volatile Financial Position: The company swung from significant net liabilities (£12,584 in 2023) to modest net assets (£1,236 in 2024), which may reflect one-off events or accounting adjustments rather than stable profitability or cash flow.

3. Positive Indicators:

• Improved Net Asset Position: The company reversed a prior net liability position and now reports positive shareholders’ funds, indicating some recovery or capital injection.
• Compliance and Filing: No overdue accounts or confirmation statements were noted, suggesting good regulatory compliance and governance practices.
• Stable Employee Base: The company maintains a consistent headcount of 1 employee, which may imply controlled operational costs.

4. Due Diligence Notes:

• Investigate the nature and terms of director loans, including repayment schedules and potential risks if the director withdraws support.
• Review detailed cash flow statements and profit & loss accounts (not provided) to assess operational cash generation and sustainability.
• Confirm the reasons behind the sharp change from negative to positive net assets between 2023 and 2024 (e.g., capital injection, asset revaluation, debt restructuring).
• Examine any contingent liabilities or off-balance-sheet obligations that might impact future solvency.
• Assess market conditions and contract pipeline within the engineering activities sector (SIC 71129) to gauge future revenue prospects.