Company Number: 12835541

Analysis Date: 2025-07-20 15:10 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity risks, as evidenced by persistent net current liabilities substantially exceeding current assets, ongoing negative net assets, and heavy reliance on secured bank loans.

2. Key Concerns:

• Severe Working Capital Deficiency: Net current liabilities of approximately £165k against current assets of only £12.5k indicate an inability to meet short-term obligations without refinancing or asset liquidation.
• Negative Shareholders’ Funds: Net liabilities of £3,230 as of June 2024, though improved from prior years, still reflect accumulated losses and potential insolvency concerns.
• High Secured Debt Exposure: Total secured bank loans exceed £209k, secured against investment property valued at £360,850, with a personal guarantee from a director. The extent of debt relative to assets implies limited equity cushion and refinancing risk.

3. Positive Indicators:

• Stable Investment Property Valuation: The principal asset is a fixed investment property valued consistently at £360,850, which provides tangible collateral backing the bank loans.
• No Overdue Filings: All statutory accounts and confirmation statements are up to date, indicating compliance with regulatory requirements.
• Experienced Directors: The directors have maintained control since incorporation with no reported disqualifications or governance issues.

4. Due Diligence Notes:

• Investigate the terms and covenants of the bank loan, including repayment schedules and any breach risks given the working capital deficit.
• Review cash flow forecasts or management accounts to assess short-term liquidity and ability to service debt.
• Clarify the nature and collectability of debtors totaling approximately £9,535, as these represent a material component of current assets.
• Assess the sustainability of rental income and occupancy related to the investment property, given that the company’s activity is letting and operating own real estate.
• Understand the reason for persistent negative retained earnings and whether a viable turnaround or recapitalization plan exists.