DALGAGI LIMITED

Executive Summary

Dalgagi Limited holds substantial investment property assets but is highly leveraged with £3 million in long-term liabilities and significant director financing. While regulatory compliance and short-term liquidity appear adequate, lack of detailed profit and loss information limits assessment of operational sustainability. Further due diligence on debt terms, operational cash flows, and director loans is recommended to clarify solvency risks.

DALGAGI LIMITED - Analysis Report

Company Number: 13129836

Analysis Date: 2025-07-20 13:20 UTC

1. Risk Rating: MEDIUM
   Dalgagi Limited shows a solid asset base dominated by investment property valued at £3.01 million and a positive net asset position of £213k as of March 2024. However, the company carries significant long-term liabilities (£3 million), primarily other creditors, which raises concerns about solvency. The current liabilities are relatively low (£32k), and net current assets are positive (£118k), which supports short-term liquidity. The absence of overdue filings and the fact the company is active and not in liquidation are positive but the relatively small share capital (£30) and director loans indicate reliance on related-party financing.

2. Key Concerns:

• High Long-Term Debt: £3 million of creditors due after more than one year against net assets of only £213k implies high leverage, which may strain solvency if asset values decline or cash flows falter.
• Director Loans and Advances: Large amounts owed to directors (circa £4 million combined advances) suggest significant insider financing which could pose risks if directors withdraw support or if conflicts arise.
• Lack of Profit & Loss Disclosure: Accounts are filed with exemption from audit and without an income statement, limiting insight into operational profitability and cash flow generation, hindering assessment of sustainability.

3. Positive Indicators:

• Strong Investment Property Asset: The core asset of investment property is valued consistently at £3.01 million, supporting asset backing for liabilities.
• Positive Net Current Assets: Current assets exceed current liabilities by £118k, suggesting short-term obligations are adequately covered.
• Compliance and Timeliness: All statutory accounts and confirmation statements are up to date with no overdue filings, indicating good regulatory compliance and governance.
• Small Employee Base: Only two employees, which may reduce fixed operational costs and enhance cash flow flexibility.

4. Due Diligence Notes:

• Review the terms and conditions of the £3 million long-term creditors to understand repayment schedule, interest obligations, and security arrangements.
• Obtain detailed profit and loss statements, cash flow statements, and management accounts to ascertain operational performance, profitability, and cash flow sufficiency to service debt.
• Assess the nature and sustainability of director loans and advances, including any repayment terms or covenants.
• Verify valuation methodology and assumptions used for investment property to evaluate risk of impairment or market value declines.
• Investigate related-party transactions and any contingent liabilities disclosed in the full accounts or notes.