Company Number: 13263485

Analysis Date: 2025-07-20 12:52 UTC

1. Risk Rating: HIGH
   Gracon Property Limited demonstrates significant solvency and liquidity concerns evidenced by large current liabilities vastly exceeding current assets, resulting in substantial net current liabilities. The company relies heavily on related party loans, raising questions about financial sustainability without external support.

2. Key Concerns:

• Negative Working Capital: Current liabilities (£889,551) exceed current assets (£73,917) by a wide margin, producing net current liabilities of approximately £815,634, indicating potential liquidity risk.
• Dependence on Related Party Loans: The company owes £877,126 to a related company under common control, an interest-free, repayable-on-demand loan, suggesting reliance on insider funding without formal commercial terms.
• Valuation and Governance Risk: The investment property valuation (£876,800) is carried out by the director himself, which may present conflicts of interest and potential overstatement of asset values without independent verification.

3. Positive Indicators:

• Stable Investment Asset: The core asset, an investment property valued consistently at £876,800, provides a tangible asset base.
• No Overdue Filings: The company’s accounts and confirmation statements are up to date, indicating regulatory compliance in filing deadlines.
• Going Concern Assertion: The director has assessed the company's ability to continue as a going concern for at least 12 months, which, though requiring scrutiny, shows management awareness of financial sustainability.

4. Due Diligence Notes:

• Investigate the nature and enforceability of the related party loan arrangements, including any plans for repayment or refinancing.
• Obtain an independent professional valuation of the investment property to confirm its fair market value and assess any impairment risks.
• Review cash flow forecasts and management plans addressing the negative working capital and large short-term creditor balances.
• Confirm no director disqualifications or regulatory sanctions exist beyond the provided data.
• Understand the company’s revenue generation and profitability, as no turnover or profit data is presented in the accounts.