Company Number: NI673266

Analysis Date: 2025-07-29 19:02 UTC

1. Risk Rating: MEDIUM
   The company shows a recent positive turnaround with net assets improving from a negative position to a positive £421,588 as of 31 October 2023. However, current liabilities remain substantial (£5.44M) relative to net current assets (£421.6k), indicating some liquidity pressure. The company is active, compliant with filings, and not in liquidation, but the scale of liabilities and quick growth warrant caution.

2. Key Concerns:

• Liquidity Risk: Although cash balances increased to £2.93M in 2023, current liabilities are high at £5.44M, suggesting potential short-term cash flow pressures if receivables or stock are not readily convertible.
• Volatility in Net Assets: The company had net liabilities in prior years (negative equity in 2021 and 2022), reflecting past losses or operational challenges that could recur.
• Concentration of Directors: Two directors share the same address and nationality; lack of diversity in management may pose governance or operational risk depending on their experience and controls in place.

3. Positive Indicators:

• Strong Cash Position: Cash increased significantly from £346k in 2022 to nearly £3M in 2023, improving liquidity and ability to meet obligations.
• Turnaround to Profitability: The company reported a comprehensive income of £425k in 2023 reversing prior losses, suggesting improved operational performance.
• Timely Compliance: No overdue accounts or confirmation statements, indicating good regulatory compliance and governance discipline.

4. Due Diligence Notes:

• Investigate the nature and terms of the £5.3M other creditors balance to understand repayment schedules and any associated risks.
• Review the quality and realizability of stock (£1.37M) and debtors (£1.56M) to assess true liquidity.
• Assess directors’ experience, related party transactions, and governance frameworks, given the concentrated management structure.
• Examine the reasons behind prior years’ negative equity and losses to evaluate sustainability of recent profit improvement.
• Confirm absence of director disqualifications or compliance issues not visible from public records.