D&L CREATION LTD

Executive Summary

D&L Creation Ltd currently faces high financial risk due to negative equity and substantial creditor liabilities, despite compliance with statutory filings and increased fixed assets. The company's liquidity position is weak, raising solvency concerns. Detailed due diligence on asset valuation and creditor arrangements is recommended to clarify the company’s financial health and operational sustainability.

D&L CREATION LTD - Analysis Report

Company Number: 13001065

Analysis Date: 2025-07-20 13:19 UTC

1. Risk Rating: HIGH
   The company shows a significant negative net asset position (£-4,600) for the latest financial year despite a large increase in fixed assets, accompanied by substantial long-term creditor liabilities (£375,357). This indicates potential solvency stress and financial instability.

2. Key Concerns:

• Negative Equity and Net Assets: The company’s net assets turned negative in 2024 from a positive £100 in prior years, signaling erosion of shareholders’ funds and potential insolvency risk.
• High Creditors Due After One Year: The £375,357 creditors falling due after more than one year is a large liability relative to net assets and may indicate reliance on external financing or debt restructuring.
• Minimal Current Assets and Working Capital Deficit: Current assets are only £280 against current liabilities of £199,034, resulting in a sizeable working capital deficit that raises liquidity concerns and questions the company’s ability to meet short-term obligations.

3. Positive Indicators:

• Timely Filings: The company is current with both accounts and confirmation statement filings, indicating compliance with Companies House requirements.
• Increase in Fixed Assets: The fixed assets increased substantially from £103,569 to £569,511 in 2024, which could signify investment in operational capacity or real estate holdings aligned with its SIC code (real estate letting).
• No Employees: The absence of employees suggests a low operational cost base, which might reduce fixed overheads and operational cash burn.

4. Due Diligence Notes:

• Nature and Valuation of Fixed Assets: Investigate what constitutes the large fixed assets—property, equipment, or other—and confirm their valuation and lien status.
• Terms of Long-Term Creditors: Examine the creditor agreements to understand repayment terms, interest obligations, and covenants that might impact cash flows.
• Cash Flow and Profitability Trends: Obtain management accounts or bank statements to assess liquidity beyond the balance sheet snapshot, and review profitability since no detailed P&L data is provided.
• Director’s Role and Expertise: Clarify the director’s involvement and expertise since the sole director’s occupation is listed as dentist, which may indicate limited operational experience in real estate.
• Contingent Liabilities or Guarantees: Check for off-balance-sheet obligations or guarantees that could further impact solvency.

Executive Summary:
D&L Creation Ltd exhibits a high-risk profile primarily driven by its negative net asset position and significant long-term creditor liabilities. Although compliant with filing requirements and showing asset growth, the company’s strained liquidity and solvency metrics raise concerns about its financial stability. Further investigation into asset composition, creditor terms, and cash flow dynamics is essential to fully assess operational viability and investment risk.