Company Number: 12723597

Analysis Date: 2025-07-29 20:09 UTC

1. Risk Rating: HIGH
   The company exhibits persistent negative net assets and shareholder funds over multiple years, indicating ongoing accumulated losses and potential solvency issues. Rising bank loan liabilities paired with declining cash balances exacerbate liquidity risks.

2. Key Concerns:

• Negative Net Assets: The company’s net assets were -£39,334 at the end of 2023, slightly improved from -£78,041 in 2022, but still negative, suggesting liabilities exceed assets and raising solvency concerns.
• High Long-term Debt: Bank loans due after one year remain substantial (£387,651 in 2023), although reduced from prior periods, representing significant financial leverage and repayment obligations.
• Cash Flow and Liquidity Pressure: Cash on hand decreased sharply from £48,686 in 2022 to £10,023 in 2023, while current liabilities remain roughly stable, indicating potential cash flow strain.

3. Positive Indicators:

• Reduced Debt Levels: Bank loans and long-term liabilities have decreased significantly from £725,502 in 2022 to £391,824 in 2023, which may signal some deleveraging or loan repayments.
• Current Assets Mostly Comprise Stocks: Stock levels (£345,690 in 2023) represent a sizable current asset base that could be monetized, assuming realizable value is close to carrying amount.
• No Overdue Filings: The company is compliant with Companies House filing requirements, reducing regulatory risk.

4. Due Diligence Notes:

• Examine Loan Terms and Covenants: Review bank loan agreements to assess repayment schedules, interest rates, and any covenant breaches that could trigger default.
• Evaluate Stock Valuation and Liquidity: Investigate the nature and marketability of stock assets to determine if they can be converted to cash in a timely manner without significant write-downs.
• Cash Flow Forecasts and Management Plans: Obtain management’s cash flow projections and plans for addressing negative equity and liquidity pressures.
• Director and Shareholder Support: Clarify any financial support or guarantees provided by the controlling director (Mr. Gary James Sutton) or other significant shareholders.
• Profit and Loss Details: Since profit and loss accounts are not filed publicly, seek internal management accounts or additional disclosures to understand operational performance and sustainability.

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