Company Number: 13167233

Analysis Date: 2025-07-29 13:55 UTC

1. Risk Rating: HIGH
   The company demonstrates a significant net liability position with negative net assets of £363,557 as of 31 December 2023, a marked deterioration from positive net assets of £319,493 the prior year. Substantial long-term creditors exceeding total assets also indicate solvency risk. Negative working capital in 2023 further highlights liquidity concerns.

2. Key Concerns:

• Solvency Risk: Total liabilities after one year (£2,417,733) exceed total assets, resulting in negative equity, signaling potential difficulties meeting long-term obligations.
• Liquidity Issues: Net current liabilities of £23,146 in 2023 (down from net current assets of £110,026 in 2022) suggest cash flow pressures in the short term. Cash balances are modest at £155k relative to liabilities.
• Profitability and Reserves: The loss reflected in the profit and loss account (-£421,697) contrasts with the previous year’s positive reserve, indicating operational challenges and potential ongoing losses.

3. Positive Indicators:

• The company has invested in fixed assets, with net tangible fixed assets increasing from £1.12M to £1.54M, suggesting commitment to operational infrastructure.
• Revenue recognition policies and accounting practices appear compliant with UK GAAP (FRS 102 Section 1A), and accounts are filed on time with no overdue returns or penalties.
• The business operates in a specialized retail sector (retail sale of bread, cakes, confectionery), which can have stable demand if managed effectively.

4. Due Diligence Notes:

• Investigate the nature and terms of long-term creditors (£2.42M) to assess repayment schedules, associated covenants, and refinancing risks.
• Review management plans or forecasts addressing the negative net asset position and liquidity tightening, including any capital injections or restructuring efforts.
• Confirm the ongoing operational performance, revenue trajectory, and profitability trends beyond the balance sheet snapshot, including cash flow statements and management accounts.
• Evaluate director backgrounds and governance practices to ensure no regulatory or compliance concerns, although no red flags appear in current appointments or filing status.