Company Number: 13658026

Analysis Date: 2025-07-20 19:13 UTC

1. Risk Rating: HIGH
   Justification: The company exhibits net liabilities with shareholders' funds negative at £7,470 as of the latest accounts. Current liabilities slightly exceed current assets, resulting in a negative working capital position. There is a significant amount of trade debtors (£1.5m) closely matched by current liabilities (£1.5m), which raises concerns about collectability and liquidity. The company is relatively new (incorporated 2021) and engaged in property development—a sector often exposed to cyclical risks and requiring strong capital backing.

2. Key Concerns:

• Negative net assets and shareholders' funds indicate insolvency on a balance sheet basis, which could undermine creditor confidence.
• Large trade debtors (£1.5m) compared to prior years (only £21 previously) suggests potential overstatement or delayed cash inflows; this may signal liquidity risk if these receivables are not collectable on time.
• Significant current liabilities including large accruals and deferred income (£1.25m) and VAT payable (£250k) could pressure short-term cash flows, especially with negative net current assets (£574 deficit).

3. Positive Indicators:

• The company holds a substantial investment property valued at £462,000, which is a tangible fixed asset providing some collateral value.
• No overdue filings or compliance issues noted; accounts and confirmation statements are up to date, reducing regulatory risk.
• Ownership and control are concentrated with experienced directors, potentially facilitating decisive governance and operational oversight.

4. Due Diligence Notes:

• Investigate the nature and collectability of the £1.5m trade debtors; verify whether these are bona fide receivables or intercompany balances with related parties.
• Review cash flow forecasts and working capital management practices to assess the company’s ability to meet imminent liabilities, including VAT and accruals.
• Clarify the terms and valuation basis of the investment property to confirm its marketability and realizable value under stress scenarios.
• Understand the origin and justification of large accruals and deferred income to identify any contingent liabilities or unrecognized commitments.
• Assess the company’s business model and revenue generation capacity given zero employees and the development focus, to evaluate sustainability and operational risks.