FOREVER ROOFLINE (YORKSHIRE) LIMITED

Risk Rating: MEDIUM While the company remains technically solvent with positive net assets, the persistent negative working capital, significant contraction in the balance sheet over the last two years, and the inherent vulnerabilities of a single-person micro-entity in the construction sector elevate the risk profile. The reliance on undefined creditor forbearance to meet short-term obligations is a material concern.

Key Concerns:

• Negative Working Capital (Liquidity Risk): The latest filed accounts (FY2025) show current liabilities (£32,176) exceeding current assets (£28,732), resulting in negative net current assets of (£3,444). This indicates the company does not have sufficient liquid assets to cover its short-term debts, relying heavily on creditor support or cash flow timing to remain operational. This is an improvement from the prior year's negative working capital of (£11,817), but remains a structural liquidity weakness.
• Significant Contraction of the Balance Sheet: Total assets have fallen sharply from a peak of £152,421 in FY2023 to £50,048 in FY2025. Similarly, net assets dropped from £56,452 in FY2022 to £17,872 in FY2025. This severe erosion of the asset base suggests either significant trading losses, substantial director withdrawals/dividends, or a combination of both, which fundamentally weakens the financial stability of the business.
• Single-Person Dependency and Key-Person Risk: The company has only one director (Mr. Terrence Armitage) who also exerts >75% control and is the sole recorded employee. In the construction and roofing sector, the sudden unavailability of the sole director/tradesman would likely lead to immediate operational cessation and an inability to service obligations.

Positive Indicators:

• Regulatory Compliance: The company is fully up to date with its statutory filing requirements. Accounts and confirmation statements are filed on time with no overdue flags, indicating basic administrative stability and compliance.
• Technical Solvency: Despite the severe contraction in assets, the company maintains a positive net asset position (£17,872) and positive shareholders' funds. It is not technically insolvent on a total balance sheet basis.
• Longevity: Incorporated in 2017, the business has operated for over seven years, demonstrating an ability to survive economic cycles and the inherent volatility of the construction sector as a micro-entity.

Due Diligence Notes:

• Composition of Current Liabilities: As a micro-entity, the filed accounts provide no breakdown of liabilities. It is critical to establish whether the £32,176 in current creditors consists of trade payables, HMRC liabilities, or director loans. If a significant portion is owed to the director, the liquidity risk is mitigated by implied subordination; if owed to trade creditors or HMRC, the going concern risk is substantially higher.
• Profitability and Dividends: The accounts lack a Profit & Loss account. An investigation into the cause of the £38,580 drop in net assets between FY2022 and FY2025 is required to determine if this reflects operational trading losses or aggressive dividend extraction by the sole director.
• Nature of Fixed Assets: Fixed assets stand at £21,316. Given the industry (roofing/building completion), it is important to verify if these are essential operational assets (e.g., a work van or scaffolding) that would be difficult to liquidate to cover short-term debts, or longer-term investments.
• Director Conduct: A full check should be conducted to ensure the sole director has no disqualification orders or adverse history with other dissolved/insolvent entities, which is a common red flag in the construction sector.