Company Number: 12548608

Analysis Date: 2025-07-20 11:16 UTC

1. Risk Rating: HIGH
   The company demonstrates significant solvency and liquidity risks, evidenced by persistent negative net current assets and a history of net losses. Although there is a recent slight improvement in net assets, the overall financial position remains precarious.

2. Key Concerns:

• Negative Working Capital: The company consistently reports negative net current assets (£-475k in 2024), indicating that current liabilities substantially exceed current assets, which threatens short-term liquidity.
• Recurring Net Losses and Low Equity: Shareholders’ funds have been negative for multiple years until a modest positive turn in 2024 (£28k), raising concerns about sustained profitability and capital adequacy.
• High Reliance on Group and Director Loans: Significant amounts are owed to group undertakings (£661k) and loans from directors (£20k), which may reflect underlying cash flow challenges and reliance on related parties for funding.

3. Positive Indicators:

• Timely Filing Compliance: No overdue filings for accounts or confirmation statements, indicating good governance and regulatory compliance.
• Improvement in Net Assets: The financial year ending 2024 shows a positive net asset position, reversing prior years of negative equity, suggesting some operational or financial progress.
• Stable Workforce: The average number of employees remained steady at 7 over recent years, implying operational consistency.

4. Due Diligence Notes:

• Investigate the nature and terms of intra-group balances and director loans to understand dependency risks and repayment obligations.
• Review detailed cash flow statements (not provided) to assess liquidity management and operational cash generation.
• Examine profitability drivers and any restructuring or strategic changes that contributed to the recent improvement in net assets.
• Confirm the valuation and realizability of tangible fixed assets, particularly given the disposals and depreciation noted.
• Assess any contingent liabilities or off-balance sheet obligations, especially given prior negative equity and ongoing finance lease commitments.