Company Number: 12514098

Analysis Date: 2025-07-19 12:26 UTC

1. Risk Rating: HIGH

Justification: Ava Nofer Limited exhibits significant solvency and liquidity risks, evidenced by persistent negative net current assets exceeding £300k and negative shareholders' funds worsening over the last five years. The current liabilities (creditors due within one year) are substantially high (£330k+), while cash balances remain negligible (£78 as of 2024 year-end). Despite owning tangible assets valued at £677,000, the company’s large creditor base and ongoing losses erode net asset value, indicating financial stress and challenges in meeting short-term obligations.

2. Key Concerns:

• Severe liquidity shortfall: The company’s current liabilities dwarf current assets by over £300,000, with minimal cash available, suggesting potential cash flow difficulties to meet immediate obligations.
• Persistent negative equity: Net assets and shareholders’ funds are negative and deteriorating (from -£5,842 in 2020 to -£17,255 in 2024), indicating accumulated losses and eroded capital base.
• Director’s loan exposure: The director's advances have increased to £327,125, reflecting reliance on director financing which may not be sustainable or easily recoverable.

3. Positive Indicators:

• Tangible fixed assets valued at £677,000 could provide collateral value or potential liquidation proceeds to cover some liabilities.
• The company is compliant with filing deadlines for accounts and confirmation statements, indicating regulatory adherence.
• Active status with a single director who holds control, implying clear governance structure without apparent director disqualifications or compliance issues.

4. Due Diligence Notes:

• Investigate the nature and terms of the director’s loan advances (£327,125) to understand repayment schedules, interest, and security arrangements.
• Review detailed cash flow statements and creditor aging to assess immediate payment obligations and funds availability.
• Examine the valuation and liquidity of fixed assets to ascertain realizable value under distress or going concern scenarios.
• Evaluate the business model and revenue generation capability in the context of continuing losses and negative equity.
• Confirm absence of any contingent liabilities or off-balance sheet obligations that may exacerbate financial risk.