HEL’S HOUSE GYM LTD

Executive Summary

Hel's House Gym Ltd is facing significant financial distress characterized by substantial negative net assets and liquidity shortfalls, heavily reliant on director funding. While the company maintains regulatory compliance and has received some government grant support, current financial metrics indicate high solvency risk and operational challenges. Further investigation into director loans and business viability is essential for a comprehensive risk assessment.

HEL’S HOUSE GYM LTD - Analysis Report

Company Number: 13605398

Analysis Date: 2025-07-29 16:08 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency risk, with persistent and increasing net liabilities reaching £111,778 as of September 2024, and negative working capital of £168,083. The large current liabilities relative to minimal current assets and cash holdings indicate considerable liquidity concerns. Operationally, the company shows signs of distress given its ongoing losses and reliance on director support.

2. Key Concerns:

• Severe Negative Net Assets and Working Capital: The company’s net liabilities and negative net current assets suggest it is unable to meet its short-term obligations without external support.
• High Director’s Current Account Liability: £135,948 is owed to the director’s account, implying reliance on director funding which may not be sustainable long term.
• Declining Asset Base and Cash Position: Fixed assets have decreased from £88,534 to £60,305, and cash reserves are low (£623), raising concerns about operational sustainability and insufficient liquidity to cover immediate expenses.

3. Positive Indicators:

• No Overdue Filings: The company is compliant with statutory filing deadlines for accounts and confirmation statements, indicating good regulatory compliance.
• Government Grant Received: The company secured a £10,000 government grant in 2022, which may have provided some financial relief and capital asset support.
• Going Concern Statement: The director affirms the going concern basis supported by ongoing director support, which at least temporarily mitigates immediate insolvency risks.

4. Due Diligence Notes:

• Investigate the nature and terms of the director’s current account loan, including whether this is being repaid or convertible into equity.
• Review cash flow projections and operational plans to understand how the company intends to address ongoing liquidity shortfalls.
• Assess the sustainability of the business model in the fitness facilities sector, especially given the reduction in fixed assets and low employee numbers.
• Verify absence of any contingent liabilities or related party transactions that may pose additional risk.
• Confirm no director disqualifications or legal actions pending against key controllers.