EVEDALE CARE LIMITED

Executive Summary

Evedale Care Limited is a newly incorporated residential nursing care provider with a substantial asset base but currently faces significant liquidity challenges due to high current liabilities exceeding current assets. While the auditor has raised no going concern issues, the company’s operating loss and reliance on the parent group for control and potentially financial support present risks to operational stability. Careful due diligence on creditor terms, group support, and cash flow plans is recommended before investment.

EVEDALE CARE LIMITED - Analysis Report

Company Number: 14849364

Analysis Date: 2025-07-29 20:08 UTC

1. Risk Rating: HIGH

Justification: The company shows a significant liquidity mismatch with current liabilities (£4,044,336) vastly exceeding current assets (£318,463), resulting in negative net current assets (-£72,599). Although net assets are positive (£632,245), the large short-term creditor balance relative to cash and debtors suggests potential solvency pressure. The company has incurred a loss (£159,998) in its first financial period and is in a capital-intensive sector with significant fixed assets, increasing risk if cash flow is constrained.

2. Key Concerns:

• Liquidity risk: Current liabilities exceed current assets by a large margin, indicating challenges in meeting short-term obligations without refinancing or additional capital.
• Operating loss: The company reported a loss of £159,998 in its first year, with interest expenses (£84,884) adding pressure, raising concerns about operational profitability and cash flow sustainability.
• Reliance on parent group: 100% ownership and control by Capital Care Group Limited suggests dependence on the parent for financial support, which may pose risks if group-level issues arise.

3. Positive Indicators:

• Auditor’s report: The independent auditor issued an unqualified opinion with no material uncertainties about going concern, implying confidence from the auditor in the company’s near-term viability.
• Asset base: Tangible fixed assets valued at over £5 million provide a substantial asset backing, which may be leveraged if needed.
• Compliance: No overdue filings or confirmation statements; governance appears current and transparent with appointed director and secretary.

4. Due Diligence Notes:

• Investigate the nature and maturity of the large current liabilities and long-term creditors to understand refinancing risks and repayment schedules.
• Review group-level support arrangements from Capital Care Group Limited to assess financial backing and any cross-company guarantees or funding commitments.
• Analyze cash flow forecasts and operational plans to evaluate how the company intends to improve profitability and liquidity.
• Confirm regulatory compliance specific to residential nursing care facilities, including Care Quality Commission status and any ongoing regulatory risks.