Company Number: 13035152

Analysis Date: 2025-07-20 13:02 UTC

1. Risk Rating: HIGH

Justification: The company exhibits significant liquidity risk as current liabilities substantially exceed current assets by approximately £1.93 million in 2024, though this is an improvement from prior years. The reliance on director loans and related party funding to meet liabilities raises concerns about operational sustainability and financial stability. While net assets have improved due to investment property additions, the company remains dependent on external financial support to continue as a going concern.

2. Key Concerns:

• Liquidity Deficit: Persistent and material negative net current assets indicate potential cash flow difficulties meeting short-term obligations.
• Related Party Debt: Significant loans from a director (£1.99 million) and a related company (£3.73 million non-current) suggest dependency on insider funding rather than external finance or operational cash flow.
• Going Concern Reliance: Directors explicitly state reliance on their financial support for ongoing operations, which presents risk if such support is withdrawn.

3. Positive Indicators:

• Growing Investment Property Asset Base: Investment property assets increased materially to over £6 million in 2024, potentially providing collateral for financing or future income.
• Improving Net Assets: Net assets increased to £355,182 in 2024 from £142,349 in 2023, indicating some capital build-up.
• Compliance: The company is active, up to date with filings, and not overdue for accounts or confirmation statements, indicating regulatory compliance.

4. Due Diligence Notes:

• Clarify terms, interest rates, and repayment plans on director and related party loans; assess their sustainability and potential for restructuring.
• Review cash flow forecasts and rental income streams from investment properties to verify operational cash generation capacity.
• Investigate the valuation methodology for investment properties and confirm fair value estimates, as these assets underpin the balance sheet.
• Examine any contingent liabilities or off-balance sheet commitments that might affect liquidity or solvency.
• Confirm directors' plans and capacity to continue financial support, including any personal guarantees or capital injections.