Company Number: 13350235

Analysis Date: 2025-07-29 20:21 UTC

1. Risk Rating:
   MEDIUM

Justification: The company has positive net assets and a growing cash balance, which are good signs, but its liabilities, particularly corporation tax and other creditors, have increased significantly year on year. The company is relatively new (incorporated 2021) and un-audited, which limits the depth of financial assurance. The presence of a significant operating lease commitment also adds financial obligations that need to be managed carefully.

2. Key Concerns:

• Rising short-term liabilities: Creditors due within one year more than doubled from £31K in 2023 to £85K in 2024, driven largely by corporation tax (£49K), other taxation and social security (£8K), and other creditors (£28K). This could pressure liquidity if cash inflows do not keep pace.
• Concentration of control and limited share capital: Three directors each control 25-50% of shares and voting rights; issued share capital is minimal at £2. This could limit external investment and dilute governance independence.
• Operating lease commitment: A new £60K non-cancellable lease commitment appears in 2024, increasing fixed financial obligations and reducing flexibility in cash flow management.

3. Positive Indicators:

• Strong net current assets and cash position: Net current assets increased to £91K from £42K, and cash at bank rose substantially from £8K to over £100K, indicating improved liquidity.
• Profit retention: Profit and loss reserves grew from £44K to £95K, demonstrating the company is retaining earnings and building equity.
• Up-to-date compliance: No overdue filings for accounts or confirmation statements, showing good regulatory compliance to date.

4. Due Diligence Notes:

• Review detailed profit and loss information to understand the driver of profits and whether earnings are sustainable. The accounts omit the income statement, limiting assessment of operational profitability.
• Investigate the nature and timing of the increased corporation tax and other creditor balances to assess if these are one-off or recurring liabilities.
• Assess the terms and impact of the operating lease commitment on future cash flows.
• Evaluate the governance structure and the implications of the concentrated shareholding on strategic decision-making and potential minority investor protections.