Company Number: SC781362

Analysis Date: 2025-07-20 14:27 UTC

1. Risk Rating: HIGH
   The company shows significant solvency and liquidity concerns, primarily due to very high long-term liabilities relative to its equity and negative working capital despite substantial fixed assets.

2. Key Concerns:

• Liquidity Risk: Current liabilities of £627,899 far exceed current assets (cash of only £5,425), resulting in a net current liability position of £622,474, indicating potential difficulty meeting short-term obligations.
• Solvency Risk: Total creditors after more than one year amount to £2,170,000, which is significantly higher than the net assets of £90,360, suggesting a highly leveraged position.
• Operational Sustainability: The company was incorporated recently (September 2023) with only one financial period completed, limiting historical performance data and increasing uncertainty about future cash flows and profitability.

3. Positive Indicators:

• The company holds substantial tangible fixed assets (£2,882,834) in land and buildings, which may provide collateral value.
• Directors are experienced farmers and also significant shareholders, which may align management incentives with company success.
• Compliance with filing deadlines and no overdue accounts or confirmation statements at this early stage indicates good regulatory adherence.

4. Due Diligence Notes:

• Investigate the nature and terms of the £2.17 million long-term creditor balance, including repayment schedules, interest rates, and security arrangements.
• Assess the company’s business plan and cash flow forecasts to understand how it intends to meet its short-term liabilities given the negative net working capital.
• Confirm the valuation and liquidity of fixed assets and whether these can be leveraged or disposed of if needed.
• Clarify the absence of profit and loss information since the statement of income was not delivered; seek management accounts or forecasts.
• Review the background and creditworthiness of the principal directors given their dual roles and significant control.