Risk Analysis: Based Upon Ltd (Company No. 05425139)

1. Risk Rating: LOW

The company presents a strongly capitalised balance sheet with £4.37M in net assets, £3.52M in cash against total liabilities of £1.89M, and no visible long-term borrowings. Twenty years of continuous trading, a stable workforce (28 employees), a clean filing record, and near-linear equity growth since 2016 support a low solvency and liquidity risk assessment. The residual risks are transparency-related (unaudited, abbreviated accounts) and structural (family concentration, luxury-market exposure) rather than financial distress indicators.

2. Key Concerns

1. Limited financial transparency. The company files under the small companies regime with audit exemption (s.477, Companies Act 2006) and has elected not to file a profit and loss account. Profitability therefore cannot be directly verified — equity movements imply profitable years (e.g., +£645k in FY2025) but declines in FY2021 and FY2024 could reflect either trading losses or distributions, and the filings do not distinguish between the two. Notably, the balance sheet total (£6.19M) exceeds the £5.1M small-company threshold, so the company sits at the upper edge of the abbreviated disclosure regime relative to its size.

2. Receivables concentration and quality. Debtors stand at £2.26M — approximately 37% of total assets and roughly 8 months' worth relative to a headcount of 28. Ageing, client concentration, and recoverability are unknown. In bespoke art and furniture commissioning, milestone billing on long-duration projects can inflate debtor balances and create single-client exposure.

3. Governance and market structure risks. All directorships and PSC positions are held by members of one family, concentrating both control and key-person risk. The business operates in discretionary luxury markets (artistic creation, bespoke furniture manufacture), where demand is cyclical and order books can contract quickly in downturns. Succession and continuity planning are relevant considerations for any long-horizon exposure.

3. Positive Indicators

• Exceptional liquidity: Cash of £3.52M covers current liabilities (£1.88M) approximately 1.9 times over; the current ratio is ~3.3x. Net current assets of £4.30M provide substantial working capital headroom.
• No visible external debt: All liabilities fall due within one year; there are no apparent long-term borrowings on the balance sheet, and provisions are de minimis (£8,738).
• Sustained capital accumulation: Shareholders' funds have grown from £1.48M (FY2016) to £4.37M (FY2025), an increase of ~£2.9M over nine years on unchanged share capital of £100 — indicating retained profits.
• Liability reduction: Creditors fell 16% year-on-year (£2.25M → £1.88M), alongside a £432k increase in cash.
• Regulatory compliance: Accounts (to 31 May 2025) and confirmation statement (to 15 April 2026) are current with no overdue filings; accounts were approved and filed within statutory deadlines.
• Operational continuity: Two decades of trading, stable employee numbers, an active trading website, and consistent asset base suggest an established, going concern.

4. Due Diligence Notes

1. Obtain management accounts or a P&L: Filed accounts omit the profit and loss statement. Verify trading margins, dividend history, and whether FY2021/FY2024 equity declines reflect distributions or losses.
2. Debtor analysis: Request an aged debtor listing and client concentration breakdown; assess provision adequacy and whether balances include related parties.
3. Charges and security: The dataset does not include a charges register. Confirm no registered charges, factoring arrangements, or bank security exist.
4. Turnover corroboration: The company qualifies as "small" via two of three tests (employees: 28; balance sheet exceeds threshold), implying turnover below £10.2M — but this is unverified. Cross-check via VAT returns or client references.
5. Stocks valuation: £408k of stock likely includes work-in-progress on bespoke commissions; assess valuation methodology and impairment risk on unfinished projects.
6. Group and intercompany exposure: The accounting policies reference "loans from fellow group companies" (likely boilerplate). Confirm the company is standalone and cash is held with regulated institutions without restriction.
7. Key-person dependency: Assess succession arrangements and whether client relationships are institutional or personal to the founding family.
8. Market sensitivity: Gauge order book and pipeline exposure to discretionary luxury spending cycles.