APPLIED CAPITAL DEVELOPMENTS LIMITED

Risk Rating: MEDIUM While the company demonstrates strong current solvency and adequate liquidity on paper, the risk rating reflects its operational profile as an intra-group asset-holding vehicle. The significant volatility in the balance sheet over recent years, heavy reliance on group undertakings for cash flow and debtors, and multiple historical name changes suggest the company's financial stability is highly dependent on the wider group's strategy and financial health, rather than standalone operational metrics.

Key Concerns: - Intra-group Dependency: The balance sheet is heavily intertwined with the wider corporate group. As of October 2024, £413,242 of the £781,265 total debtors is due from group undertakings, and £45,000 of the £57,754 total creditors is owed to group undertakings. The company's liquidity is therefore contingent upon the solvency and cash flow timing of its parent, Applied Capital Limited. - Volatile Financial Profile: The company has experienced massive balance sheet fluctuations. Total assets surged from £559,378 (April 2020) to £5,999,697 (April 2022), before falling back to £841,645 (October 2024). Similarly, cash reserves peaked at £1,944,834 in April 2022 but stand at only £60,380 as of October 2024. This volatility indicates project-based or asset-transfer activities rather than stable, recurring operations. - Historical Identity Shifts: The company has changed its name four times since incorporation (from Lister Square to Braid Hills to Speciality Hotels to BH Assets, and finally to Applied Capital Developments). Coupled with a recent change in the accounting reference date (extending the latest period to 18 months) and the complete disposal of its tangible fixed assets (motor vehicles), this suggests the entity has undergone significant strategic pivots, which introduces uncertainty regarding its current operational mandate.

Positive Indicators: - Strong Solvency Position: Net current assets stand at £783,891 against current liabilities of only £57,754. The company has a substantial working capital buffer and no long-term liabilities disclosed in the latest filing, indicating minimal immediate insolvency risk. - Corporate Governance: The company utilizes the professional corporate secretarial services of Morton Fraser Secretaries Limited, a reputable Scottish law firm. Furthermore, filings are up to date and not overdue, and the accounts are prepared under FRS 102, demonstrating compliance with regulatory filing requirements. - Clear Ownership Structure: The People with Significant Control (PSC) register clearly identifies Applied Capital Limited as the ultimate controlling parent, owning more than 75% of shares and voting rights. This transparency reduces the risk associated with opaque ownership structures.

Due Diligence Notes: - Approval Date Anomaly: The latest financial statements were signed and authorized for issue on "27 October 2025"—a date that is in the future. This is likely a clerical error (perhaps meant to be 2023 or 2024) and should be clarified with the company's administrators to ensure the accounts are legally valid. - Parent Group Financials: Given the heavy reliance on group balances, a thorough assessment of this company cannot be completed without reviewing the consolidated financial statements of the ultimate parent, Applied Capital Holdings Limited. - Debtor Recoverability: £135,065 of the current debtors is classified as "Corporation tax recoverable." Given that the company reported a negative P&L reserve movement (shareholders' funds dropped from £1,054,594 to £783,891, though this covers an 18-month period), the basis and expected timing of this tax recovery should be verified. - Operational Purpose: The current SIC code (74909 - Other professional, scientific and technical activities n.e.c.) is vague, and the accounts state "No description of principal activity." An investor should seek clarification on what the company's actual day-to-day operations currently entail, especially following the disposal of its tangible assets.