Company Number: 12919125

Analysis Date: 2025-07-20 14:19 UTC

1. Risk Rating: MEDIUM
   Justification: The company is currently active and filing timely accounts and confirmation statements, indicating compliance with statutory requirements and basic governance. However, financial data reveals recurring net current liabilities, a small positive net asset position, and reliance on director-related debtor balances which raise concerns about liquidity and operational cash flow stability.

2. Key Concerns:

• Liquidity Risk: The company shows negative net current assets for the last three reported years (£708 in 2024 and £1,217 in 2023 and 2022), indicating current liabilities slightly exceed current assets. This suggests potential short-term liquidity constraints.
• Reliance on Director Debtors: Debtors largely consist of amounts due from directors (£6,984 in 2024, £9,900 in prior years), which could imply informal financing arrangements rather than operational receivables, raising questions on sustainable working capital.
• Small Equity Base and Dividend Payments: Shareholders’ funds are very low (£714 in 2024) and have decreased significantly since 2020 (£40,527). Notably, a near-equal dividend distribution (£79,500) to profit (£79,534) in 2024 drastically reduces retained earnings, which could impair the company’s capacity to build reserves or absorb future losses.

3. Positive Indicators:

• Compliance and Governance: All filings (accounts and confirmation statements) are up to date and not overdue, indicating good regulatory compliance.
• Profitability: The company reported a profit of £79,534 in 2024, showing operational profitability in the latest period.
• Stable Management Team: The three directors have been in place since incorporation, suggesting stable leadership and control. The company is controlled by directors with clear ownership percentages.
• Defined Contribution Pension Scheme: Indicates some attention to employee benefits and regulatory compliance in employment matters.

4. Due Diligence Notes:

• Examine Cash Flow Statements: To assess actual cash generation versus reported profits, especially given the negative working capital position.
• Clarify Nature and Terms of Director Debtors: Understand whether these are loans, temporary overdrafts, or operational receivables and their impact on liquidity risk.
• Assess Dividend Policy Rationale: Investigate the justification and sustainability of dividend payments that nearly wipe out profits and its impact on capital reserves.
• Review Tax Creditor Details: Current liabilities consist entirely of tax (£23,745 in 2024), which requires scrutiny to confirm if this is deferred tax, VAT, PAYE, or corporation tax, and if payment plans or disputes exist.
• Evaluate Business Model Sustainability: Given the SIC code (82990) and the nature of the business, further review the client base, revenue streams, and competitive positioning to ascertain operational stability.