Company Number: 14123153

Analysis Date: 2025-07-29 12:40 UTC

1. Risk Rating: HIGH
   The company exhibits a high risk primarily due to its negative equity position and significant long-term borrowings that exceed its asset base. The inability to cover current liabilities with current assets further exacerbates solvency concerns.

2. Key Concerns:

• Negative Net Assets and Shareholders’ Deficit: As of 31 May 2024, the company reports net liabilities of £54,978 and a shareholders’ funds deficit of £55,978, indicating the company’s liabilities exceed its total assets.
• Substantial Long-term Debt: The company has loans and borrowings of £300,163 due after more than one year, which is significantly higher than its total assets and may be difficult to service given the current financial structure.
• Minimal Liquidity and Working Capital Deficit: Current assets stand at only £105 against current liabilities of £2,019, resulting in a negative net current assets position of £1,914, suggesting potential cash flow challenges to meet short-term obligations.

3. Positive Indicators:

• Active Status and Compliance: The company is active, up to date with statutory filings (accounts and confirmation statements not overdue), indicating regulatory compliance and operational status.
• Ownership and Control: The sole director and 75-100% shareholder, Mary Ngugi, is also the person with significant control, which may facilitate swift decision-making.
• Investment Property Asset: The company holds investment property valued at £246,282, which represents the majority of its fixed assets and could provide potential future income or capital appreciation.

4. Due Diligence Notes:

• Valuation of Investment Property: The property valuation was conducted internally by the director who is not a qualified valuer; an independent professional valuation is necessary to verify the accuracy and fair value of this significant asset.
• Loan Terms and Repayment Schedule: Further details on the £300,163 loan are required, including lender identity, interest rates, repayment terms, and any security provided, to assess sustainability of debt servicing.
• Cash Flow Analysis: Investigate cash flow forecasts and operational income streams to evaluate the company’s ability to meet ongoing liabilities and service debt.
• Related Party Transactions: The £100 debtor balance owed by related parties should be reviewed for collectability and any potential conflicts of interest.
• Director’s Plans and Strategy: Understanding the director’s business plan for addressing the deficit and improving financial health is critical to assess operational sustainability.