THE HIGHLANDS GROUP HOLDINGS LIMITED

Executive Summary

THE HIGHLANDS GROUP HOLDINGS LIMITED exhibits financial distress signs, with negative net assets and net current liabilities, compounded by low cash balances and growing creditor obligations. While regulatory compliance and sector characteristics are positive, the company’s ability to meet short-term obligations and sustain operations without additional capital or improved cash flow is uncertain. Further due diligence should focus on debtor quality, cash flow viability, and creditor relationships.

THE HIGHLANDS GROUP HOLDINGS LIMITED - Analysis Report

Company Number: 13230009

Analysis Date: 2025-07-20 13:31 UTC

1. Risk Rating: HIGH
   The company is showing negative net assets and net current assets for the latest financial year, indicating potential solvency issues. Current liabilities exceed current assets, and cash balances are minimal, raising liquidity concerns.

2. Key Concerns:

• Negative net assets of £8,655 as of 30 November 2023 and consistent losses reflected in the profit and loss reserve.
• Net current liabilities of £8,655, with current liabilities (£211,562) exceeding current assets (£202,907), and very low cash on hand (£1,332), indicating potential cash flow stress.
• Increasing trade creditors (£106,367) and tax liabilities (£16,363) without corresponding cash reserves may imply payment delays or financial strain.

3. Positive Indicators:

• The company is compliant with filing deadlines; no overdue accounts or confirmation statements, showing good regulatory discipline.
• Directors appear stable and engaged, with no disqualifications or governance red flags noted.
• The business operates in management consultancy (SIC 70229), a service sector that generally requires low capital expenditure and can be scalable.

4. Due Diligence Notes:

• Investigate the nature and collectability of the large debtor balance (£201,575), specifically the split between trade and other debtors and aging profiles.
• Review the causes of negative equity and recurring losses, including revenue trends, margin pressures, and expense management.
• Confirm the company’s cash flow forecasts and plans to address the negative working capital, including any financing arrangements or support from shareholders or related entities.
• Examine the details behind the significant increase in trade creditors and tax liabilities—are these deferred payments or indications of liquidity pressure?
• Assess ownership structure and the role of the controlling shareholder and related party transactions, especially given the presence of another entity (The Highlands Group Limited) holding significant control.