Company Number: SC736051

Analysis Date: 2025-07-20 11:32 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns. Despite owning substantial fixed assets (investment properties valued at £705,000), its current liabilities vastly exceed current assets, resulting in a negative net working capital of approximately £165,000. The large long-term bank loan (£534,665) compared to minimal equity (£5,727 net assets) highlights high financial leverage and weak equity buffer.

2. Key Concerns:

• Liquidity Issues: Current liabilities (£166,508) far exceed current assets (£1,900), indicating potential difficulties in meeting short-term obligations as they fall due.
• High Leverage: The company’s long-term bank loan (£534,665) is nearly equivalent to the value of fixed assets, with negligible net assets and shareholder funds, reflecting a fragile capital structure.
• Profit and Loss Omission: The accounts omit the profit and loss account and do not provide turnover or profitability data, limiting insight into operational performance and cash flow generation.

3. Positive Indicators:

• Asset Base: Ownership of investment property valued at £705,000 provides a tangible asset base that could support refinancing or sale if needed.
• No Overdue Filings: The company has current filings for accounts and confirmation statements with no overdue penalties, indicating regulatory compliance.
• Stable Directorship: The main director, Mr. Graham Robert Gibb, maintains controlling interest and directorship, potentially ensuring continuity in management.

4. Due Diligence Notes:

• Investigate the company’s cash flow and income streams to assess operational viability and capacity to service debt.
• Request detailed profit and loss statements or management accounts to evaluate profitability and expense trends.
• Clarify terms and covenants attached to the bank loan to understand refinancing risks or potential triggers for default.
• Review directors’ loans and related party transactions for any potential conflicts or financial support mechanisms.
• Confirm market conditions and valuation basis for the investment property to assess asset liquidity and fair value accuracy.