Company Number: 12877624

Analysis Date: 2025-07-19 12:14 UTC

1. Risk Rating: MEDIUM

Justification: Gwernos Limited shows a significant increase in liabilities relative to assets over the latest financial year, with current liabilities far exceeding current assets, resulting in negative net working capital. However, the company holds substantial tangible fixed assets (land and buildings) that provide some collateral value. The company is active, not in liquidation, and filing returns are up to date. The company’s dormant account category status conflicts somewhat with the presence of fixed assets and liabilities, suggesting limited trading activity but with growing obligations.

2. Key Concerns:

• Liquidity Risk: The latest year-end current assets stand at only £100 with no cash available, while current liabilities have increased to £52,399, resulting in a net current liability of -£52,299. This indicates an inability to meet short-term obligations from current assets.
• Solvency Risk: The company has long-term liabilities (bank loans) of £96,363 against net assets of £51,338, indicating gearing and potential solvency pressure if asset value is overestimated or illiquid.
• Accounting and Classification Ambiguity: The company is classified as dormant for filing purposes despite holding substantial fixed assets and significant creditor balances, which raises questions about the operational status and accuracy of financial reporting.

3. Positive Indicators:

• Substantial Tangible Assets: The company owns land and buildings valued at £200,000, which were revalued upward by £69,123 in the latest year, providing asset coverage for creditors.
• No Overdue Filings: Both accounts and confirmation statements are filed on time, indicating compliance with statutory requirements.
• Stable Directorship and Control: Directors have been consistent since incorporation with no indication of disqualification or governance issues. The presence of a corporate PSC with majority shareholding may provide stability.

4. Due Diligence Notes:

• Verify the nature of the dormant classification given active balance sheet items and liabilities; check if the company has traded or plans to trade.
• Investigate the terms, covenants, and security of the bank loans and creditor balances, especially the fixed and floating charges held by Bath and West Finance 3 Limited.
• Review cash flow forecasts and business plans to assess the company’s ability to service debts, particularly short-term liabilities given the negative working capital.
• Confirm the valuation methodology and marketability of the tangible fixed assets to assess realisable value in a stressed scenario.
• Clarify the relationship and transactions with group undertakings and related parties given creditor balances owed to them.