Company Number: 12845310

Analysis Date: 2025-07-20 11:35 UTC

1. Risk Rating: HIGH
   The company exhibits high solvency risk due to persistent and significant negative net assets and net current liabilities over multiple years, indicating inability to cover short-term and long-term obligations.

2. Key Concerns:

• Negative Net Assets and Working Capital Deficit: The company has consistently reported net liabilities (~£94k to £160k) and negative net current assets (~£94k to £161k) for the past four years, signaling ongoing financial distress.
• Cash Position vs. Current Liabilities: Cash reserves are very low (£15,640 as of 2023) compared to current liabilities (£189,491), raising liquidity concerns and potential inability to meet imminent payments.
• Management and Control Changes: The controlling shareholder and director changed recently (Aug 2024), with full control transferred from previous managing director to new director. This may reflect restructuring or operational uncertainty.

3. Positive Indicators:

• Timely Filing and Compliance: No overdue accounts or confirmation statements; filings are up to date, indicating regulatory compliance and good governance in reporting.
• Stable Employee Base: Average employee count remains consistent at 3, suggesting operational continuity at a small scale.
• Exemption from Audit: Qualification as a small company with reduced filing requirements, implying a manageable operational scale.

4. Due Diligence Notes:

• Investigate the nature and terms of current liabilities, particularly any short-term borrowings or trade payables that may pressure liquidity.
• Review the business plan and cash flow forecasts under new management to assess turnaround strategies and sustainability.
• Examine the reasons behind the significant accumulated losses and persistent negative equity, including market conditions and operational challenges in the retail sector for furniture and lighting.
• Confirm related party transactions or financial support from shareholders given the high level of negative equity.
• Assess any contingent liabilities or off-balance-sheet risks not disclosed in the accounts.