Company Number: 14923477

Analysis Date: 2025-07-19 12:13 UTC

1. Risk Rating: MEDIUM

Justification: Franthea Limited is a recently incorporated private limited company with modest share capital and a relatively high level of current liabilities compared to cash and current assets. There is an apparent liquidity pressure indicated by negative net current assets in the latest financial year. However, the company holds significant fixed assets and has no overdue filings or liquidation status, which somewhat mitigates immediate solvency concerns.

2. Key Concerns:

• Liquidity Risk: The company’s net current assets have shifted from a positive £198,967 in 2023 to a negative £115,621 in 2024, largely driven by a reduction in cash from £350,000 to £35,567 while current liabilities remained stable around £151,000. This suggests potential cash flow constraints.
• Reliance on Director Loans: The directors’ loan account shows a balance of approximately £75,348 owed to a director, included in current liabilities. This may indicate reliance on director financing that could affect financial flexibility.
• Short Operating History: Incorporated in June 2023, the company has only one full financial year of accounts. Limited historical financial data restricts the ability to assess operational stability and profitability trends.

3. Positive Indicators:

• Strong Net Assets Position: Despite liquidity issues, net assets increased to £336,339 in 2024 from £199,067 in 2023, reflecting the acquisition of tangible fixed assets valued at £456,870, which may support long-term stability.
• No Filing or Compliance Issues: The company’s accounts and confirmation statement filings are up to date with no overdue returns or penalties noted.
• Clear Ownership and Governance: The company is controlled by identifiable persons with significant control (PSCs) and an active board of directors, suggesting governance transparency.

4. Due Diligence Notes:

• Investigate the nature and valuation of the tangible fixed assets acquired in 2024 to assess if they are productive assets or potentially illiquid investments.
• Review cash flow statements and working capital management to understand the causes of the significant cash depletion and if the company has plans to restore liquidity.
• Examine the director loan account terms and repayment plans to evaluate the sustainability of director financing and any associated risks.
• Assess profitability and revenue generation, as the absence of a profit and loss account in the filing limits insight into operational performance.
• Confirm any contingent liabilities or off-balance-sheet commitments not disclosed in the accounts.