Company Number: 14641127

Analysis Date: 2025-07-29 16:38 UTC

1. Risk Rating: HIGH
   Hector Francis Limited exhibits high risk primarily due to negative net assets and net current liabilities, indicating insolvency concerns at the balance sheet date. The company’s reliance on related party loans and invoice financing with fixed and floating charges further underscores liquidity stress.

2. Key Concerns:

   • Negative Net Assets (£-23,270): The company’s liabilities exceed its assets, which raises solvency risk and questions the ability to meet obligations as they fall due.
   • Net Current Liabilities (£-25,443): Current liabilities exceed current assets, indicating potential cash flow difficulties for short-term commitments.
   • Related Party Loan Dependence: The £38,000 interest-free loan from the parent company, repayable on demand, signals reliance on external funding rather than operational cash flow, which may not be sustainable long-term.

3. Positive Indicators:

   • Compliance with Filing Obligations: Both accounts and confirmation statements are filed timely with no overdue filings, reflecting good regulatory compliance and governance practices.
   • Active Status with Recent Incorporation: Incorporated in 2023 and currently active, the company is in an early stage which may imply potential for growth and restructuring.
   • Clear Ownership Structure: Presence of significant control persons with clear shareholding and voting rights may facilitate decisive management and strategic direction.

4. Due Diligence Notes:

   • Examine Cash Flow Statements and Profit & Loss Data: The accounts omit profit and loss information; securing this data is critical to assess operational viability and cash generation capability.
   • Review Terms and Security of Invoice Financing: The fixed and floating charge granted to Zodeq Ltd needs scrutiny to understand creditor priority and risk exposure.
   • Investigate Directors’ Plans and Business Model: Understanding strategic plans to address negative equity and liquidity will inform sustainability prospects. Also, verify any contingent liabilities or off-balance sheet risks.
   • Confirm Related Party Transactions: Verify the nature and terms of loans and other transactions with parent and related entities to assess financial support reliability.