Company Number: 12511244

Analysis Date: 2025-07-29 12:42 UTC

1. Risk Rating: HIGH
   Docsville Studios Limited exhibits a high risk profile primarily due to persistent and increasing net liabilities, negative net current assets, and dependency on director support for going concern. The company’s financials show an erosion of shareholders’ funds and worsening liquidity, indicating solvency and cash flow concerns.

2. Key Concerns:

• Solvency Risk: The company has net liabilities of £415,876 as of June 2024, worsening from £220,128 six months earlier, signaling that total liabilities exceed total assets. This negative net asset position is a significant solvency red flag.
• Liquidity Concerns: Negative net current assets of £415,876 indicate that current liabilities exceed current assets, suggesting potential difficulty meeting short-term obligations. Cash on hand is low (£18,779), with a notable overdraft (£9,833), exacerbating liquidity strain.
• Operational Stability: The company holds a large stock balance (production costs of £4.9m) relative to its debtors and cash balances, which may be illiquid. Moreover, debtor balances have halved in six months (£703k to £336k), possibly reflecting collection issues or reduced revenue. The business model relies on continued director support as noted in the accounts, which raises sustainability concerns without external capital or improved operations.

3. Positive Indicators:

• Timely Filings: The company’s accounts and confirmation statements are up to date, with no overdue filings, indicating regulatory compliance and governance discipline.
• Industry Activity: Operating in television programme production (SIC 59113), a sector with potential for revenue growth if projects succeed.
• Director and PSC Stability: Single director and two PSCs have maintained control since incorporation, suggesting stable management and ownership structure.

4. Due Diligence Notes:

• Investigate nature and realizability of the large stock (film production costs) to assess if these assets can be converted to cash or revenue.
• Review debtor aging and collectability given the substantial decrease in debtors.
• Understand the extent and terms of director support referenced in going concern note, including any formal or informal financial arrangements.
• Clarify secured creditor claims due to fixed and floating charges on assets, and assess potential for creditor enforcement.
• Assess revenue trends and profitability beyond balance sheet data, including pipeline of productions and licensing agreements.