Company Number: 14156271

Analysis Date: 2025-07-29 19:51 UTC

1. Risk Rating: HIGH

Justification: The company exhibits significant liquidity concerns with current liabilities vastly exceeding current assets, resulting in a large negative net working capital position. Although it holds investment property as a fixed asset, the ability to meet short-term obligations is questionable given the current asset and cash levels relative to liabilities. The company is very young (incorporated 2022) with limited financial history and modest net asset growth, indicating operational scale and sustainability are not yet established.

2. Key Concerns:

• Liquidity Risk: Current liabilities of approximately £3.89 million dwarf current assets of £66.8k, leaving a negative net current asset position of about £3.82 million, a critical short-term solvency issue.
• Reliance on Parent Undertaking: Over £1.55 million of current liabilities are owed to the parent company, suggesting dependency on related party funding which may not be sustainable or guaranteed.
• Limited Cash Reserves: Cash on hand is only £14,475, insufficient to cover any significant portion of current liabilities, raising risk of payment default or need for urgent refinancing.

3. Positive Indicators:

• Investment Property Asset Base: Fixed assets valued at £4.08 million (investment property) provide a tangible asset backing and potential for future value realization.
• No Overdue Filings: The company is compliant with annual accounts and confirmation statement filings, indicating good governance and regulatory compliance to date.
• Controlled by Experienced Directors: Directors include a barrister and a management consultant, potentially providing professional oversight and strategic management capabilities.

4. Due Diligence Notes:

• Confirm terms and conditions of loans and amounts owed to the parent company, including repayment schedules and any guarantees or covenants.
• Review rental income streams and occupancy rates for investment properties to assess operational cash flows and income stability.
• Investigate any contingent liabilities or off-balance sheet obligations that may further impact liquidity or solvency.
• Evaluate the parent company’s financial strength and willingness to support ongoing funding needs.
• Assess market conditions for investment property revaluation and potential for asset liquidation if needed.