Company Number: 12575155

Analysis Date: 2025-07-19 12:26 UTC

1. Risk Rating: HIGH
   Justification: The company shows net current liabilities of £4.32 million and negative shareholders’ funds (£33,528) as at 31 March 2021, indicating insolvency on a balance sheet basis at that date. Current liabilities exceed current assets significantly, which may impair the ability to meet short-term obligations. The company is a subsidiary with audit exemption, limiting the depth of external financial scrutiny.

2. Key Concerns:

• Solvency Issues: Negative net assets and shareholders’ funds suggest the company was insolvent at the last reporting date. The extent of liabilities owed to group undertakings (£4.36 million) forms a large part of creditors, indicating intercompany debt reliance.
• Liquidity Risk: Current liabilities (£4.71 million) far exceed current assets (£391k), translating to a negative working capital position. This poses risks for day-to-day operational liquidity and cash flow management.
• Operational Uncertainty: The company is in the early stages (incorporated 2020) and appears to be capital intensive (significant fixed assets under construction) with no indication of revenue or profitability in the data provided. This raises questions about sustainability without ongoing funding support from the parent group.

3. Positive Indicators:

• Active Status and Compliance: The company is active with no overdue filings for accounts or confirmation statements, which indicates management is maintaining regulatory compliance.
• Experienced Board: The presence of a Chartered Accountant as a director and a Finance Director suggests competent financial oversight.
• Group Support: The large amounts owed to group undertakings imply potential financial backing or intra-group funding arrangements that could mitigate external solvency and liquidity pressures.

4. Due Diligence Notes:

• Obtain the most recent financial statements beyond March 2021 to assess current solvency and liquidity positions, especially given the company’s early stage and capital expenditure profile.
• Review the nature and terms of the intercompany balances to understand funding arrangements and repayment schedules.
• Investigate the company’s revenue generation, cash flow forecasts, and business plan to evaluate operational viability and sustainability.
• Confirm any guarantees or security interests (such as the fixed and floating charge granted to Close Leasing Limited) that might affect creditor priority or refinancing options.
• Assess the impact of director changes, including resignation and new appointments, on governance stability.