D P RACING LIMITED

Executive Summary

D P Racing Limited exhibits a low solvency and liquidity risk profile, supported by solid net assets and cash reserves. The company maintains good regulatory compliance and financial reporting standards. Key considerations for investors include the finance lease obligations and concentrated ownership structure, which merit further operational due diligence.

D P RACING LIMITED - Analysis Report

Company Number: 13561650

Analysis Date: 2025-07-20 14:00 UTC

1. Risk Rating: LOW
   D P Racing Limited demonstrates a strong liquidity position with substantial net current assets and cash reserves relative to current liabilities. The company has a positive net asset position that has increased steadily over the last three years, indicating financial stability and solvent operations. There are no overdue filings or indications of regulatory non-compliance.

2. Key Concerns:

• Reliance on finance leases: The company carries hire purchase obligations (£18,657 total, with a reduction in long-term liabilities), which could impact cash flows if not managed prudently.
• Concentration of control and ownership: One individual holds 75-100% ownership and voting rights, potentially raising governance risk from lack of diversity in control.
• Limited employee base: Operating with only one employee (the director) may pose operational risks related to capacity and succession.

3. Positive Indicators:

• Strong liquidity: Cash balances remain consistent around £110k with net current assets increasing to £125.6k in 2024 from £104.5k in 2023.
• Increasing net assets and shareholders’ funds: Up from £129k in 2023 to £155k in 2024, reflecting retained earnings growth and prudent financial management.
• Up-to-date statutory filings: No overdue accounts or confirmation statements, indicating compliance with Companies House requirements.
• Clear financial reporting: The accounts are prepared under FRS 102 with detailed notes and show transparency over finance leases and related party loans.

4. Due Diligence Notes:

• Review the terms and repayment schedule of the finance leases/hire purchase agreements to assess future cash flow commitments and potential refinancing risks.
• Investigate the business model sustainability given the single employee/director setup and reliance on one major shareholder for operational decisions.
• Confirm the nature and terms of the loan to the shareholder disclosed within debtors to ensure no related party transaction risks.
• Understand the company’s revenue streams and client base under SIC 93199 (Other sports activities) to assess operational stability and market risks.