HIGHER ORBIT LIMITED

Executive Summary

HIGHER ORBIT LIMITED has demonstrated a notable improvement in its financial position over the past year, moving from net liabilities to net assets. Despite this positive development, the company's liquidity remains constrained due to substantial creditor balances and modest cash reserves, warranting careful monitoring of its debt structure and working capital management. The company maintains good regulatory compliance and shows signs of operational growth, but further due diligence on the nature of its liabilities and asset liquidity is recommended.

HIGHER ORBIT LIMITED - Analysis Report

Company Number: 13259578

Analysis Date: 2025-07-20 17:49 UTC

1. Risk Rating: MEDIUM

Justification: The company has shown a significant turnaround in net assets from negative £13,331 in 2023 to a positive £10,670 in 2024, indicating improving solvency. However, the presence of considerable long-term and short-term liabilities, especially loans from directors and other creditors, combined with relatively low cash balances and a small equity base, suggest potential liquidity concerns and reliance on external funding. The company is relatively young (incorporated 2021) and has expanded its employee base from 2 to 4, implying operational growth but also increased overheads.

2. Key Concerns:

• Liquidity Risk: Cash at bank is modest (£28,310) against current liabilities of £100,967, although net current assets are positive due to inventories valued at £190,000, which may not be readily convertible to cash.
• High Level of Debt: Substantial creditor balances include £66,865 loans from directors and £115,003 other creditors repayable after more than one year, indicating dependency on related-party and other financing.
• Negative Historical Net Assets: The company had negative shareholders' funds in prior years, reflecting past losses that might impact creditworthiness and investor confidence.

3. Positive Indicators:

• Improved Financial Position: Turnaround from net liabilities to net assets within one year signifies operational improvement or successful capital injection.
• Compliance: Timely filing of accounts and confirmation statements with no overdue filings suggests good regulatory compliance.
• Business Diversification: Engagement in multiple SIC activities (management consultancy, real estate trading, and retail via internet) could provide diversified revenue streams supporting operational stability.

4. Due Diligence Notes:

• Investigate the nature and terms of director loans and other long-term creditors to assess refinancing risk and potential encumbrances on assets.
• Verify the realizability of inventory valued at £190,000, including its liquidity and turnover rate.
• Review the company's cash flow statements and forecasts to evaluate ongoing liquidity and ability to meet short-term obligations.
• Assess related-party transactions and governance controls given the director’s loans and small shareholder equity.
• Confirm the reasons behind the previous name change and any implications for business continuity or reputation.