COMMS GROUP INTERNATIONAL (UK) LIMITED

Executive Summary

Comms Group International (UK) Limited is experiencing significant solvency and liquidity challenges with negative net assets and current liabilities far exceeding current assets and no cash reserves. Despite timely statutory filings and a board with financial expertise, the company's dependence on group funding and ongoing losses raise material concerns about its operational sustainability. Further detailed due diligence on funding arrangements and business viability is strongly recommended before considering investment.

COMMS GROUP INTERNATIONAL (UK) LIMITED - Analysis Report

Company Number: 14085361

Analysis Date: 2025-07-29 12:49 UTC

1. Risk Rating: HIGH
   The company shows significant and persistent negative net current assets and net liabilities, indicating solvency concerns. The absence of cash and reliance on amounts owed to group undertakings to cover current liabilities highlight liquidity risks. The company's short operating history and mounting losses raise operational sustainability questions.

2. Key Concerns:

• Severe Negative Working Capital: Net current liabilities of approximately £37,000 to £39,000 over the last two reported periods with negligible cash reserves (£0 cash at latest reporting date) indicate an inability to meet short-term obligations from liquid assets.
• Ongoing Losses and Negative Equity: Shareholders' funds are deeply negative (-£37,000+), reflecting cumulative losses and potential erosion of capital, which undermines solvency.
• Dependency on Group Funding: Large amounts owed to group undertakings (£29,266 at 31 March 2024) form the bulk of current liabilities, suggesting reliance on related parties for liquidity rather than operating cash flow.

3. Positive Indicators:

• Compliance with Filing Requirements: Accounts and confirmation statements are filed on time with no overdue filings, indicating good regulatory compliance and governance practices.
• Experienced Directors: The board includes qualified accountants and a CEO, which may support sound financial and operational management.
• Small Company Exemption: The company benefits from small company financial reporting regimes, reducing administrative burden during early development stages.

4. Due Diligence Notes:

• Investigate the nature and terms of amounts owed to group undertakings to assess funding sustainability and risk of withdrawal.
• Review business plan and cash flow forecasts to evaluate operational viability and timeline to profitability.
• Confirm whether there are any material contingent liabilities or off-balance sheet obligations not disclosed in the accounts.
• Assess related party transactions for potential conflicts or financial support arrangements.
• Verify the company's revenue streams and client contracts given the minimal turnover information and low current asset balances.
• Clarify the reasons for sustained losses and strategy to address negative equity.