DELTA REDWOOD DEVELOPMENTS LIMITED

Executive Summary

The company shows early signs of financial stabilization with a turn to a positive net asset position, but the extremely thin equity and working capital buffers mean liquidity risks remain. Compliance and governance appear satisfactory with no overdue filings or director issues. Further inquiry into asset quality and operational viability is recommended before considering material investment exposure.

DELTA REDWOOD DEVELOPMENTS LIMITED - Analysis Report

Company Number: 14062525

Analysis Date: 2025-07-19 12:35 UTC

1. Risk Rating: MEDIUM
   The company has recently moved from a negative net asset position to marginally positive net assets, but the net asset value remains very low (£1,089), indicating minimal equity buffer. Current liabilities are nearly equal to current assets, suggesting tight liquidity. Limited financial and operational history as a micro-entity incorporated in 2022 adds uncertainty.

2. Key Concerns:

• Very low net asset base: The company’s net assets are barely positive, which could restrict its ability to absorb financial shocks or losses.
• Liquidity tightness: Current assets (£405,692) just exceed current liabilities (£403,320), leaving a minimal working capital cushion of £3,008. This poses potential short-term cash flow risks.
• Limited operational track record and employee base: With only one employee and incorporation in 2022, there is limited evidence of operational sustainability or revenue diversification.

3. Positive Indicators:

• Improved financial position in latest year: Net assets improved significantly from negative £13,958 to positive £1,089 within one year, suggesting recent capital infusion or improved operations.
• No overdue filings or compliance issues: Accounts and confirmation statements are filed on time, indicating good regulatory compliance.
• Stable and experienced management: Two current directors have been in place since incorporation, with no records of disqualification or governance concerns.

4. Due Diligence Notes:

• Clarify nature and source of the large increase in current assets between 2023 and 2024 (from £42,716 to £405,692) and whether these are cash or receivables.
• Examine the composition and timing of current liabilities to assess short-term payment obligations and liquidity management.
• Review business model and contracts to confirm revenue generation and operational sustainability given the micro-entity classification and small staff complement.
• Investigate any related party transactions given the family-named directors and shareholders with significant control.