GEMMAS OF LEIGH LTD

Executive Summary

Gemmas Of Leigh Ltd is a newly incorporated private limited company operating in the food service sector, currently showing negative working capital and shareholders’ funds in its first year. While regulatory compliance and asset holdings are positive, the company’s financial position reflects high solvency risk and dependence on the director’s financial support. Further due diligence on liabilities, cash flow forecasts, and operational plans is recommended to assess long-term viability.

GEMMAS OF LEIGH LTD - Analysis Report

Company Number: 14923451

Analysis Date: 2025-07-19 12:21 UTC

1. Risk Rating: HIGH
   The company exhibits a significant negative net current asset position (-£55,066) and negative shareholders' funds (-£21,323) within its first financial year. This indicates solvency concerns and raises questions about its ability to meet short-term liabilities without additional financing or support.

2. Key Concerns:

• Solvency Risk: The company’s current liabilities (£91,726) considerably exceed its current assets (£36,660), producing a working capital deficit that suggests potential difficulties in meeting obligations as they fall due.
• Negative Equity: Shareholders’ funds are negative, indicating accumulated losses or undercapitalization, which may impair the company's financial stability and investor confidence.
• Dependence on Director Support: The director’s note on going concern explicitly states reliance on her continued financial support, highlighting a lack of independent operational cash flow sufficiency at this early stage.

3. Positive Indicators:

• No Filing or Compliance Issues: All statutory filings (accounts and confirmation statements) are up to date with no overdue notices or penalties, indicating sound regulatory compliance and governance to date.
• Clear Ownership and Control: The sole director and 75-100% shareholder is identified with no disqualifications or adverse records reported, suggesting stable and transparent ownership.
• Tangible Fixed Assets: The company holds tangible fixed assets valued at £33,843 (net book value), which provide some asset backing against liabilities.

4. Due Diligence Notes:

• Investigate the nature and maturity of the current liabilities (£91,726), including any related party loans or trade creditors, to assess repayment risk and cash flow timing.
• Review the company’s cash flow projections, business model viability, and break-even timeline to evaluate operational sustainability beyond director support.
• Confirm the director’s financial support arrangements and any contingent liabilities or guarantees that may not be reflected in the balance sheet.
• Assess the competitive position and market prospects in the take-away food and licensed restaurant sector, given the company's SIC codes, to understand revenue generation potential.