ASPIRE HOMES AND DEVELOPMENTS LIMITED

Executive Summary

Aspire Homes and Developments Limited exhibits high financial risk primarily due to its negative working capital and minimal equity base. The company depends heavily on director loans to maintain operations, which raises concerns over liquidity and solvency. While compliant with filing obligations and actively progressing projects, further scrutiny of its financing arrangements and cash flow viability is advised.

ASPIRE HOMES AND DEVELOPMENTS LIMITED - Analysis Report

Company Number: 14314672

Analysis Date: 2025-07-20 11:56 UTC

1. Risk Rating: HIGH
   Justification: Aspire Homes and Developments Limited shows persistent net current liabilities and extremely low net asset values, indicating significant liquidity and solvency risks. The company relies heavily on director loans to finance operations, and its working capital position is negative for consecutive years.

2. Key Concerns:

• Negative Net Current Assets: The company has net current liabilities of £901 at 31 August 2024, slightly improved from £1,285 the previous year, but still negative, indicating potential cash flow difficulties.
• Minimal Equity Base: Shareholders' funds stand at only £101, which is negligible and suggests the company is barely capitalized. This weak equity position exposes creditors to high risk.
• Dependence on Director Loans: Related party transactions reveal substantial director loans totaling nearly £783,507 (£391,754 + £391,753), which implies external financing is insufficient or unavailable. This dependence may affect operational stability and governance.

3. Positive Indicators:

• Active Status and Timely Filing: The company is active with no overdue accounts or confirmation statements, indicating compliance with statutory filing requirements.
• Increasing Stock Levels: Stock (work in progress) increased from £707,300 to £851,100, suggesting ongoing business activity and project development in line with its construction and building development SIC codes.
• Small Employee Base: With only two employees, the company maintains a lean operational structure, which may help control costs in a capital-constrained environment.

4. Due Diligence Notes:

• Investigate the nature and terms of the director loans: Are they formalized with repayment schedules and interest, or are they informal advances?
• Review cash flow forecasts and project timelines to assess whether the company can convert stock (work in progress) into receivables and cash in a timely manner.
• Confirm whether the company has any secured or contingent liabilities not disclosed in the accounts, which could exacerbate liquidity risks.
• Assess the background and creditworthiness of directors, given their significant financial support to the company.
• Evaluate the market conditions and contractual pipeline for the construction projects to determine operational sustainability.