Company Number: 14402450

Analysis Date: 2025-07-29 19:59 UTC

1. Risk Rating: HIGH

The company exhibits significant solvency and liquidity concerns, with net current liabilities substantially exceeding current assets and a declining net asset position over the past two years. Although it holds considerable fixed assets, these are heavily leveraged by short- and long-term creditors, raising questions about the company’s ability to meet near-term obligations.

2. Key Concerns:

• Severe Negative Working Capital: Current liabilities (~£561,795) far exceed current assets (~£6,052), resulting in net current liabilities of approximately -£555,743, indicating acute liquidity risk.
• Declining Net Assets: Net assets have fallen from £31,867 in 2023 to £16,317 in 2024, suggesting erosion of shareholder equity and potential operational losses or asset impairments.
• High Long-Term Debt: Creditors due after more than one year stand at £429,965, representing a substantial financial obligation relative to the modest equity base.

3. Positive Indicators:

• Significant Fixed Assets: The company owns fixed assets valued over £1 million, which could provide collateral value or potential for refinancing.
• Compliance with Filings: No overdue filings or confirmation statements, indicating good regulatory compliance and governance.
• Stable Management: Directors have been in place since incorporation with no known disqualifications or governance issues.

4. Due Diligence Notes:

• Asset Valuation and Liquidity: Investigate the nature, marketability, and encumbrances on fixed assets to assess realizable value.
• Debt Terms and Covenants: Review creditor agreements, especially long-term debt maturity profiles, interest rates, and any financial covenants.
• Cash Flow and Profitability: Obtain detailed cash flow statements and profit and loss data (not filed due to micro-entity status) to evaluate operational sustainability.
• Related Party Transactions: Examine any transactions with controlling entity Drgr Ltd or directors for potential financial dependencies or conflicts.
• Future Business Plans: Understand management’s strategy to improve liquidity and solvency, including refinancing or asset sales.