Company Number: 13548827

Analysis Date: 2025-07-20 16:38 UTC

1. Risk Rating: MEDIUM
   The company shows a negative net asset position (£-20,140) as of the latest accounts date, reflecting net liabilities. However, this is primarily due to significant loan financing secured against its investment property, which has substantial value (£1,195,483). The shareholder loan is interest-free and repayable only when resources allow, reducing immediate liquidity pressure. While the company is not overdue on filings and remains active, the reliance on debt financing and negative working capital suggests moderate solvency and liquidity risks.

2. Key Concerns:

• Negative net assets position indicating the company’s liabilities slightly exceed its assets, raising solvency concerns.
• Significant current liabilities (£501,066) compared to current assets (£114,199) resulting in a net current liability position (£386,867), which may imply liquidity constraints.
• The shareholder loan is unsecured and interest-free but substantial (£500,566), and while repayment is deferred, it represents a contingent obligation that could impact future cash flows.

3. Positive Indicators:

• The primary fixed asset, an investment property valued at £1,195,483, provides tangible security for the bank loan and potentially stable income through rental streams.
• The company is up to date with all statutory filings and confirmation statements, indicating compliance with regulatory requirements.
• The bank loan is secured against the investment property and has a maturity date in 2027, providing a medium-term horizon to manage repayment.
• Rental income and management fees are recognized on a straight-line basis, suggesting predictable revenue streams aligned with the investment property.

4. Due Diligence Notes:

• Investigate the terms, covenants, and repayment schedule of the secured bank loan to assess refinancing or repayment risks.
• Review cash flow forecasts and rental income sustainability to evaluate liquidity and operational cash generation capabilities.
• Confirm the nature and collectability of debtor balances (£22,600) and the likelihood of shareholder loan repayment or conversion.
• Assess the valuation methodology and market comparables for the investment property to validate asset carrying value.
• Consider potential exposure to interest rate changes or market downturns affecting property value and debt servicing capacity.