DERMARK LIMITED

1. Risk Rating: MEDIUM

While DERMARK LIMITED is currently compliant with filing requirements and carries a "Dormant" status—which insulates it from operational risk—the balance sheet structure presents a medium financial risk. The company exhibits extremely thin equity (£8,403) relative to total liabilities (£176,385), and there is a fundamental inconsistency between the registered business activity (retail food/beverage) and the declared dormant status. Furthermore, the historical financials show a sustained erosion of shareholder funds over the last decade, dropping from £45,734 in 2016 to £8,403 in 2025.

2. Key Concerns

• Thin Equity Base & High Leverage: The company's net assets represent less than 5% of its total liabilities. With net assets of only £8,403 against total liabilities of £176,385, the company has virtually no margin to absorb any unexpected costs, contingent liabilities, or asset write-downs.
• Erosion of Shareholder Value: Historical data indicates a consistent decline in net assets/shareholder funds, falling from £45,734 in 2016 to £8,403 in 2025. Although the company is now dormant and the decline has slowed, this historical trajectory suggests that the business destroyed significant value before ceasing operations.
• Status vs. SIC Code Discrepancy: The company is officially classified under SIC code 47110 (Retail sale in non-specialised stores with food, beverages or tobacco predominating), yet the accounts explicitly state the company is dormant and has not traded. While common for companies that have ceased operations, this mismatch raises questions about whether the registered business activity accurately reflects the nature of the assets and liabilities currently held on the balance sheet.

3. Positive Indicators

• Regulatory Compliance: The company is fully up to date with its statutory filing requirements. The most recent accounts (made up to 31 July 2025) were approved and signed just two weeks after the year-end (14 August 2025), indicating strong administrative compliance. There are no overdue filings.
• Positive Working Capital: Despite the thin equity, the company maintains a positive working capital position. Current assets (£176,512) exceed current liabilities (£130,197), yielding a current ratio of approximately 1.35. This suggests the company should theoretically be able to meet its short-term obligations as they fall due.
• Stability in Dormancy: Because the company is dormant and not trading, it is not actively burning cash or generating operational losses. Net assets have stabilized, only declining by £360 between 2024 and 2025, indicating the balance sheet is largely static.

4. Due Diligence Notes

• Composition of Liabilities: It is critical to determine the nature of the £176,385 in total liabilities. Given the dormant status and lack of trading, these are likely either related-party (director) loans or legacy trade creditors from prior operations. If they are director loans, the risk of sudden repayment demands must be assessed.
• Composition of Current Assets: Similarly, the nature of the £176,512 in current assets must be verified. As a dormant company, it is unclear whether these assets are cash, inter-company receivables, or legacy stock/debtors. If they are illiquid, the positive working capital ratio may be misleading.
• Future Intentions: An investor should clarify the strategic intent of maintaining a dormant company with a £1 share capital and significant legacy balances. Is the entity being held for property/asset purposes, awaiting formal dissolution, or does the director plan to reactivate it?
• Director Background: As the sole director and PSC (with over 75% control), Hasan Celik's broader business interests and financial standing should be reviewed to understand if the liabilities are connected to his other ventures.