COGENT PROPERTIES DEV 2 LTD

Executive Summary

Cogent Properties Dev 2 Ltd shows a recent improvement in net assets but continues to face notable liquidity challenges with significant current liabilities exceeding current assets. The company’s operational continuity depends heavily on related party funding, introducing a medium risk profile. While the asset base is solid with investment property holdings, close scrutiny of cash flows and funding arrangements is advisable.

COGENT PROPERTIES DEV 2 LTD - Analysis Report

Company Number: 12817468

Analysis Date: 2025-07-20 14:59 UTC

1. Risk Rating: MEDIUM

The company displays a marginally positive net asset position in its latest financial year, indicating a slight improvement from prior years' deficits. However, significant negative net current assets and a high level of current liabilities relative to current assets suggest liquidity pressures. The going concern assumption relies on continued financial support from related parties, which introduces dependency risk.

2. Key Concerns:

• Liquidity Risk: Net current liabilities exceed £1.5 million as of the latest accounts, with current liabilities vastly outweighing current assets. This imbalance could impair the company’s ability to meet short-term obligations without external funding.
• Reliance on Related Party Funding: The going concern note explicitly states that the company’s operations depend on loans from a company under common control and a related party. This dependency poses risks if such support is withdrawn.
• Negative Profit & Loss Reserve History: Although the profit and loss account has improved to a positive balance (£2,049), the company has shown consistent negative reserves in prior years, indicating historical losses.

3. Positive Indicators:

• Improved Net Asset Position: The company moved from a net liability position (-£623) to a slightly positive net asset position (£2,050) in the latest year, showing some financial recovery.
• Substantial Investment Property Asset: Fixed assets consist mainly of investment property valued at approximately £2.43 million, providing a tangible asset base.
• Compliance with Filings: The company’s accounts and confirmation statements are up to date with no overdue filings, indicating good regulatory compliance.

4. Due Diligence Notes:

• Confirm the nature and security of related party loans: Understand terms, repayment schedules, and whether these loans are secured against assets.
• Evaluate cash flow forecasts: Assess how the company plans to manage its significant working capital deficit and sustain operations without jeopardizing solvency.
• Review investment property valuations and market conditions: Verify that the investment property values are realistic and supported by current market data, given their materiality to the balance sheet.
• Investigate director’s background and governance: Although only one director is listed, understanding his track record and governance practices is important given the company’s financial position.