Company Number: 15660852

Analysis Date: 2025-07-29 14:03 UTC

1. Credit Opinion: DECLINE
   Hampson House Limited shows a weak financial position with net liabilities of £15,678 as at 30 April 2025, shortly after its incorporation in April 2024. The company’s current liabilities (£17,081) significantly exceed its current assets (£1,403), indicating poor liquidity and working capital deficiency. The overdraft or director’s loan account of £14,615 further signals reliance on related-party funding which may not be sustainable. Given the negative net assets and absence of operating profits, the company is currently unable to service external debt or meet its immediate financial obligations without additional funding or support. The business is a new entrant in the unlicensed restaurant and café sector (SIC 56102), a competitive and high-risk industry, which adds to the risk profile. Management is concentrated in one individual who controls 100% of shares and voting rights, limiting checks and balances.

2. Financial Strength
   The balance sheet is fragile with net liabilities and negative shareholders’ funds of £15,678. Current liabilities exceed current assets by a large margin, resulting in a net working capital deficit of £15,678. The main liability is a director’s loan (£14,615), which while interest-free or related-party may be renegotiated, still represents a debt that will need eventual repayment. No fixed assets or other tangible resources are shown to secure any credit facilities. The company’s capital base is nominal (£1), indicating minimal equity cushion. Absence of retained earnings or P&L reserves confirms that no profits have been generated since incorporation.

3. Cash Flow Assessment
   Cash balances are very low (£1,403), insufficient to cover short-term liabilities or operational expenses. Negative working capital implies the company is dependent on creditor financing and director loans to fund day-to-day operations. The lack of positive cash flow and reliance on director funding is a red flag for liquidity risk. There is no evidence of trade debtor balances or inventory, suggesting the business may be at an early stage without significant trading activity or sales yet. This cash flow weakness means the company currently cannot meet debt service requirements without external or equity injections.

4. Monitoring Points

• Track monthly cash flow and liquidity to ensure short-term obligations can be met.
• Monitor changes in director’s loan account and any new external borrowings or equity injections.
• Review operating performance and profit generation once trading is underway.
• Watch for any overdue filings or changes in company status.
• Assess management actions to improve working capital and reduce reliance on related-party loans.
• Keep an eye on industry conditions in the unlicensed restaurant sector as they are sensitive to economic downturns.