Company Number: 12818314

Analysis Date: 2025-07-20 14:49 UTC

1. Risk Rating: HIGH
   The company exhibits a high risk profile primarily due to persistent negative net current assets (working capital deficits) and a very low equity cushion relative to borrowings, indicating potential solvency and liquidity challenges.

2. Key Concerns:

• Negative Net Current Assets: Consistently negative by approximately £26k to £28k over recent years, driven by current liabilities (£30.9k) exceeding current assets (~£5k), which suggests short-term liquidity stress.
• High Leverage: Total borrowings stand at approximately £95k (£30k current + £65.6k non-current) against net assets of only £3.5k, implying heavy reliance on debt financing and limited equity buffer.
• Lack of Independent Property Valuation: The investment property is carried at a static value (£95.1k) without an external valuation, which raises concerns about the reliability of asset valuation and potential impairment risks.

3. Positive Indicators:

• Compliance and Filing: The company is up to date with filing accounts and confirmation statements, indicating regulatory compliance and governance adherence.
• Going Concern Basis: Directors have prepared accounts on a going concern basis, suggesting confidence in ongoing operations.
• Stable Investment Property Asset: The core asset, investment property, has maintained its book value year-on-year, providing a tangible asset base.

4. Due Diligence Notes:

• Investigate the nature and terms of borrowings, including covenants, repayment schedules, and interest obligations to assess refinancing risk.
• Obtain an independent valuation of the investment property to verify fair value and potential impact on net assets.
• Review cash flow statements and bank statements to understand liquidity trends and ability to service short-term liabilities.
• Assess any contingent liabilities or off-balance-sheet obligations not disclosed in the accounts.
• Evaluate the business model and rental income generation to determine operational sustainability given the absence of employees and limited current assets.