EUTHENIA DEVELOPMENTS LTD

Executive Summary

Euthenia Developments Ltd shows significant financial risk with negative net assets and a large secured loan outweighing liquid resources, indicating potential solvency and liquidity concerns. The company complies with filing requirements and holds substantial development stock, but further due diligence on recent financials and debt arrangements is necessary to assess operational sustainability.

EUTHENIA DEVELOPMENTS LTD - Analysis Report

Company Number: 13452409

Analysis Date: 2025-07-29 17:14 UTC

1. Risk Rating: HIGH
   The company shows net liabilities and a large long-term loan exceeding current assets significantly, indicating potential solvency and liquidity risks. The presence of substantial secured debt and negative equity, combined with no recent profitability information, raises concerns about financial stability.

2. Key Concerns:

• Negative Net Assets and Shareholders’ Funds: The company reported net liabilities of £8,167 as of June 2022, indicating that liabilities exceed assets and equity is negative.
• High Long-Term Secured Debt: There is a loan of £7,156,559 payable after more than one year, secured against all company assets, which poses risk if cash flow generation is insufficient to service this debt.
• Limited Liquidity (Low Cash Balances): Cash at bank is only £35,497 against current liabilities of £140,986, suggesting constrained liquidity and potential cash flow challenges.

3. Positive Indicators:

• No Overdue Filings: Accounts and confirmation statements are filed on time, demonstrating regulatory compliance and governance discipline.
• Active Status and Recent Director Appointment: The company remains active with current directors in place, which indicates ongoing operations and management oversight.
• Stock Valued at Cost or Net Realisable Value: The stock (work in progress) is substantial (£7.2m) and is accounted for conservatively, with impairment reviews noted.

4. Due Diligence Notes:

• Current Financial Position and Subsequent Period Performance: Obtain the most recent management accounts or interim financials post-June 2022 to assess if the company has improved liquidity, profitability, or reduced debt.
• Loan Terms and Covenants: Review detailed loan agreements for covenants, repayment schedules, and implications of any breaches or restructuring.
• Realisable Value and Saleability of Stock: Validate the marketability and expected completion timelines for the property developments held as stock, as these underpin the company’s asset base and ability to repay debt.
• Director Resignation Impact: Consider the impact of the recent resignation of one director (June 2025) on governance and operational continuity.

Executive Summary:
Euthenia Developments Ltd exhibits a high-risk profile primarily due to its negative net assets and significant secured debt relative to liquid assets, raising concerns over solvency and liquidity. While regulatory compliance appears sound and the company maintains substantial development stock, the financial leverage and limited cash reserves warrant careful scrutiny of its ongoing operational viability and debt servicing capacity. Further investigation into recent financial performance and loan conditions is recommended to clarify the company’s risk exposure.