Company Number: 13140167

Analysis Date: 2025-07-20 17:57 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns, with consistent net liabilities, negative shareholders' funds, and large current and long-term liabilities relative to minimal current assets and cash.

2. Key Concerns:

• Negative Net Assets and Shareholders' Funds: The company has reported negative net assets for four consecutive years, with shareholders’ funds declining from -£7,198 in 2021 to -£2,289 in 2024, indicating persistent accumulated losses or deficits.
• Severe Liquidity Shortfall: Current liabilities (_{£198,750) vastly exceed current assets (£1-£319), resulting in large negative net current assets (}-£72,728 to -£74,670), suggesting difficulty meeting short-term obligations.
• High Long-Term Debt Burden: The company holds £198,750 in bank loans due after one year with no corresponding increase in asset value or cash reserves, raising concerns about debt servicing capacity and refinancing risk.

3. Positive Indicators:

• Stable Investment Property Asset: The fixed assets, entirely investment properties, have remained valued at £269,189 over four years, indicating no impairment and a tangible asset base.
• Timely Filing and Compliance: The company is up to date with both accounts and confirmation statement filings, with no overdue returns or accounts, suggesting compliance with regulatory requirements.
• Clear Ownership and Governance: Ownership and control are concentrated with Mr. David Shaw, who is also a director, providing centralized decision-making.

4. Due Diligence Notes:

• Examine Loan Terms and Covenants: Investigate the nature, interest rates, repayment schedule, and security arrangements of the £198,750 bank loans to assess refinancing risk and potential impact on solvency.
• Review Revenue Generation and Cash Flow: The accounts do not disclose turnover or profit and loss details fully; clarifying the income statement and cash flow position is essential to evaluate operational viability.
• Assess Valuation and Marketability of Investment Property: Confirm the fair value methodology and market conditions underpinning the £269,189 valuation to determine realistic asset liquidity.
• Understand Negative Equity Origins: Analyze the cause of persistent negative equity, including historical losses, dividends, or write-downs, to ascertain sustainability.
• Evaluate Directors' and Management Backgrounds: Given the occupations and roles of the directors, assess their experience relevant to property investment and financial management.