Company Number: NI678453

Analysis Date: 2025-07-29 20:06 UTC

1. Risk Rating: MEDIUM
   The company has moved from negative equity in 2023 to positive shareholders' funds in 2024, showing improvement. However, net current assets are modest (£10.4k), and client monies held represent a significant creditor balance (£61k), which can complicate liquidity. The business is small and single-director operated, which limits operational resilience.

2. Key Concerns:

• Liquidity Pressure: Despite improvements, current liabilities (£177k) significantly exceed current assets excluding client monies, and client monies are a large creditor item. This concentration may stress cash flows if client funds are delayed or mismanaged.
• Small Scale and Dependency: The firm employs only one person (the director), indicating heavy reliance on a single individual for operations and client relationships, increasing operational risk.
• Negative Equity History and Limited Capital: The company reported negative shareholders' funds in 2023 and only £100 share capital, reflecting limited financial buffer and potential vulnerability to unexpected expenses or downturns.

3. Positive Indicators:

• Positive Net Assets in Latest Year: Shareholders’ funds improved to £14,627 by September 2024, indicating recent profitability or capital injections.
• Up-to-date Filings: No overdue accounts or confirmation statements, showing good regulatory compliance.
• Growing Work in Progress and Debtors: Work in progress increased substantially to £75k and debtors to nearly £30k, suggesting active client engagement and revenue generation.
• Clear Control and Governance: Single director and PSC is consistent, reducing complexity in decision-making and potential governance conflicts.

4. Due Diligence Notes:

• Verify the nature and management of client monies and confirm segregation and safeguarding procedures to mitigate regulatory and liquidity risk.
• Assess cash flow patterns in detail, focusing on timing of receipts from debtors and client balances versus creditor obligations.
• Review director’s capacity to sustain operations alone and plans for business continuity or scaling.
• Confirm absence of any contingent liabilities or legal/regulatory issues not disclosed in accounts.
• Evaluate the quality and recoverability of work in progress and trade debtors to ensure revenue recognition is reliable.