Company Number: 13040877

Analysis Date: 2025-07-29 15:49 UTC

1. Risk Rating: HIGH

The company exhibits significant solvency concerns, with persistent negative net current assets and shareholders’ funds over multiple years. The liabilities exceed current assets consistently, indicating an inability to cover short-term obligations from liquid assets. This financial position suggests elevated risk for creditors and investors.

2. Key Concerns:

• Negative Net Current Assets: The company’s current liabilities (£620k) exceed current assets (£596k) as of 31 March 2024, resulting in net current liabilities of approximately £24k and a worsening trend from previous years.
• Negative Shareholders’ Funds: The accumulated losses reflected in retained earnings have deepened, with shareholders’ funds at negative £22,935, indicating erosion of equity and potential insolvency.
• High Amounts Owed to Associates: Creditors include substantial sums owed to related parties (£590k), which may indicate reliance on intra-group financing and potential liquidity strain.

3. Positive Indicators:

• Timely Filings: The company is up to date with statutory filing obligations, including accounts and confirmation statements, indicating compliance with regulatory requirements.
• Increasing Current Assets: Current assets have increased from £520k in 2023 to £596k in 2024, reflecting some growth in stock and debtors.
• Stable Directorship: The two directors have been in place since incorporation with no noted disqualifications or changes, suggesting stable governance at the management level.

4. Due Diligence Notes:

• Investigate the nature and terms of amounts owed to associates to assess risk exposure and dependency on related party funding.
• Review cash flow statements and profitability data (not provided) to understand operational performance and whether losses are recurring or temporary.
• Clarify the valuation and liquidity of stock, given it represents a large portion of current assets, to assess if it can be converted into cash promptly.
• Evaluate any contingent liabilities or off-balance sheet commitments that might exacerbate financial stress.
• Confirm whether there are any plans or strategies from management to restore solvency and improve working capital.