Company Number: 13885468

Analysis Date: 2025-07-29 15:07 UTC

1. Risk Rating: HIGH

Justification: The company exhibits significant liquidity risk as current liabilities vastly exceed current assets, resulting in a large negative net working capital. There is also a material director loan balance that appears to have increased substantially, indicating potential related party financing reliance. Although net assets are positive due to investment properties, the ability to meet short-term obligations is questionable.

2. Key Concerns:

• Severe liquidity shortfall: Current liabilities of approximately £5.2 million compared to current assets of only £41k (cash £19k) at 28/02/2025, producing negative net current assets of about £5.16 million.
• Large unsecured, interest-free director loan balance of over £5.1 million, with no clear repayment plan, indicating dependence on internal funding and potential governance risk.
• Absence of turnover and no employees reported, suggesting an early-stage or inactive operational profile which may impact cash generation and sustainability.

3. Positive Indicators:

• Ownership of investment properties valued at £5.46 million at fair value, which supports asset backing and net positive equity (£48,963).
• No overdue filings for accounts or confirmation statements, indicating compliance with statutory requirements.
• Company is active and relatively newly incorporated (Feb 2022), potentially in early stages of development with growth prospects.

4. Due Diligence Notes:

• Investigate nature and terms of director loans, including rationale for advances, repayment expectations, and impact on financial stability.
• Review cash flow forecasts and working capital management plans to assess how the company intends to address the significant short-term liability gap.
• Assess valuation methodology of investment properties and confirm realizable value under current market conditions.
• Clarify operational status, sources of revenue, and business model to understand sustainability and future profitability.
• Confirm no undisclosed contingent liabilities or related party transactions that might affect solvency.