Company Number: 12807828

Analysis Date: 2025-07-20 12:02 UTC

1. Risk Rating: MEDIUM
   The company shows adequate net assets and positive working capital, indicating basic solvency. However, there is a noticeable decline in net assets and current assets from previous years, alongside a significant reduction in cash and trade debtors, which may signal emerging liquidity pressures. The small shareholder base and reliance on a single director also raise concerns about operational and governance resilience.

2. Key Concerns:

• Declining Financial Position: Net assets nearly halved from £27,462 in 2023 to £14,433 in 2024; current assets dropped substantially by over 50%, mainly cash and debtors.
• Concentration of Control: Single director and sole significant shareholder (owns 75-100%) increases risk of governance issues and dependency on one individual for operational continuity.
• Dividend Distribution vs Profit: Dividends of £17,767 paid out despite a profit of only £4,738 in the year, which could erode retained earnings and weaken financial buffers.

3. Positive Indicators:

• Positive Net Current Assets: Despite declines, net current assets remain positive at £12,435, suggesting the company can cover short-term liabilities.
• No Filing or Compliance Issues: Accounts and confirmation statements are up to date with no overdue filings or penalties reported.
• Stable Sector Activity: Operating in quantity surveying, a professional service sector with consistent demand, supporting operational sustainability.

4. Due Diligence Notes:

• Review Dividend Policy: Investigate rationale behind dividend payments significantly exceeding profits and its impact on cash reserves and equity.
• Examine Cash Flow Trends: Obtain cash flow statements for the past 2-3 years to assess liquidity management and identify any short-term funding stress.
• Director Dependence: Confirm contingency plans or additional governance structures to mitigate risks related to single-person control and continuity.
• Customer Concentration and Debtor Quality: Assess debtor aging and client diversification to understand credit risk and revenue stability.