Company Number: 12862993

Analysis Date: 2025-07-29 20:58 UTC

1. Risk Rating: MEDIUM
   The company shows a significant imbalance between current assets and current liabilities, with negative net current assets over multiple years, indicating potential liquidity pressure. However, it maintains positive net assets supported by substantial fixed assets (property), and there are no overdue filings or signs of regulatory non-compliance.

2. Key Concerns:

• Liquidity Risk: Current liabilities (£387,801) greatly exceed current assets (£7,379) as of 2023, resulting in negative net working capital (-£28,714). This is a red flag regarding short-term cash flow and the ability to meet obligations as they fall due.
• High Long-Term Debt: Total creditors due after one year stand at approximately £387,801, including secured bank loans (£171,746). The sizeable leverage against property assets could pressure operational cash flows if revenues falter.
• Declining Cash Position: Although cash has improved slightly to £2,111 in 2023 from £121 in 2022, it remains very low relative to liabilities, signaling tight cash reserves for ongoing operational needs.

3. Positive Indicators:

• Asset Backing: The company holds significant tangible fixed assets (£467,175), primarily freehold land and buildings valued at £460,000, which provides collateral for debt and some solvency comfort.
• Regulatory Compliance: All statutory accounts and confirmation statements are filed on time, with no overdue filings or penalties, indicating good governance and regulatory adherence.
• Stable Shareholders’ Funds: Net assets and shareholders’ funds have remained positive and relatively stable (£49,225 in 2023), suggesting residual value and no erosion of equity despite operational liquidity challenges.

4. Due Diligence Notes:

• Investigate the nature and terms of the long-term loans, including repayment schedules and covenants, to assess refinancing risk and debt service capacity.
• Review cash flow forecasts and working capital management to understand how the company plans to address persistent negative net current assets and meet short-term obligations.
• Confirm the valuation method and marketability of the freehold property assets, and whether these can be readily leveraged or sold if needed.
• Examine revenue stability and occupancy rates given the company operates in the hotel accommodation sector, which can be volatile and sensitive to economic cycles.
• Clarify director and ownership details, as no persons with significant control are listed, to assess governance and decision-making robustness.