HEADWAY DEVON

1. Risk Rating: MEDIUM

Justification: The available financial data (terminating March 2016) demonstrates a stable and improving financial position with strong liquidity and growing net assets. However, the significant data gap—no financial history provided beyond 2016 despite accounts reportedly filed up to March 2025—creates material uncertainty about the current financial position. The charitable structure (limited by guarantee) and regulatory compliance are positive, but the dated financial information prevents a full solvency assessment.

2. Key Concerns:

• Outdated Financial Data: The financial history provided ends at March 2016, creating a nine-year gap. While Companies House records indicate accounts have been made up to March 2025, the absence of this data in the analysis set means current solvency, liquidity, and operational performance cannot be verified. This is the most significant limitation.

• Asset Concentration in Illiquid Tangibles: Tangible fixed assets of £482,022 represent approximately 59% of total assets (£810,739). For a charity providing health services, this heavy concentration in property or equipment could constrain liquidity if operational circumstances change rapidly.

• Long-term Creditor Obligations: Creditors due after more than one year stood at £144,423 in 2016, representing approximately 23% of net assets. Without understanding the nature of these obligations (e.g., loans, deferred income, property-related liabilities), the risk profile remains uncertain.

3. Positive Indicators:

• Strengthening Balance Sheet: Net assets grew consistently from £350,405 (2014) to £561,529 (2015) to £619,197 (2016), indicating improving financial health and accumulated surpluses.

• Strong Liquidity Position: Net current assets of £281,598 against current liabilities of only £47,119 yields a current ratio of approximately 7:1. Cash nearly doubled from £101,432 to £189,472 between 2015 and 2016, suggesting robust cash generation.

• Regulatory Compliance: Accounts and confirmation statements are filed and up to date with no overdue status. The company has maintained active status since 2003 with no indications of administration, liquidation, or dissolution proceedings.

• Governance Structure: Seven directors plus a company secretary provide reasonable board oversight for a charitable organisation. No director disqualification records are apparent.

4. Due Diligence Notes:

• Obtain Recent Accounts: Request and review filed accounts for years ending March 2017 through March 2025 to assess current financial position, trend continuity, and any deterioration since 2016.

• Charity Commission Records: As a charity, Headway Devon will also file with the Charity Commission. These filings typically contain more detailed income and expenditure data than Companies House abbreviated accounts and should be reviewed for operational sustainability assessment.

• Nature of Long-term Creditors: Investigate the composition of the £144,423 in long-term creditors—determine whether this represents loans, finance arrangements, deferred grant income, or other obligations, and the terms attached.

• Tangible Asset Composition: Clarify what constitutes the £482,022 in tangible fixed assets. If property-related, understand whether these are operational premises or investments, and whether they are encumbered.

• Income Dependency Analysis: As a charity dependent on donations (per website description), assess funding source diversification, grant reliance, and contractual income stability. The abbreviated accounts do not disclose income streams.

• Affiliation with Headway UK: Determine the relationship with the national Headway charity network, as this may affect brand, referral pathways, and funding access.