Company Number: 13894109

Analysis Date: 2025-07-29 19:00 UTC

1. Risk Rating: LOW
   The company exhibits strong net asset growth and positive working capital in the latest financial year, with no overdue filings or indications of financial distress. Its solvency and liquidity positions have improved markedly, supporting a low risk assessment.

2. Key Concerns:

• Stock Levels: High inventory (£2.63M) relative to current liabilities may pose liquidity risks if turnover slows or stock becomes obsolete.
• Debtor Concentration: Trade debtors (£1.18M) represent a substantial portion of current assets, requiring monitoring of collection efficiency.
• Director Advances: A negative balance on director advances (£50k) warrants review to confirm appropriate controls and repayment terms.

3. Positive Indicators:

• Improved Working Capital: Net current assets increased from a negative position (£-78k) to a strong positive (£1.1M) in the latest year, indicating improved short-term liquidity.
• Rising Net Assets: Shareholders’ funds nearly tripled from £672k to £1.83M, signaling enhanced capital strength.
• Compliance: No overdue accounts or confirmation statements; filings are up to date.
• Going Concern: Directors explicitly state confidence in the company’s ability to continue as a going concern.
• Operational Scale: Employs approximately 49 staff, indicating a stable operational base.

4. Due Diligence Notes:

• Inventory Quality and Turnover: Confirm stock turnover ratios, obsolescence provisions, and valuation methods to evaluate liquidity risk embedded in inventory.
• Debtor Aging and Credit Risk: Review the age profile of receivables and credit control policies to assess collectability and potential bad debts.
• Director Advances: Investigate the nature, approval, and recovery plans for advances to directors to ensure compliance with governance standards.
• Intangible Asset Valuation: Verify the basis for intangible assets (notably website costs) and amortisation policies, as these can affect reported asset quality.
• Subsidiary Investments: Clarify the composition and performance of investments (£580k) to understand group exposure.

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