Company Number: 13751085

Analysis Date: 2025-07-29 19:13 UTC

1. Risk Rating: MEDIUM
   Hovafly Limited exhibits a modest solvency position with low but positive net assets and shareholders’ funds as of the latest financial year. However, the company’s negative net current assets indicate liquidity constraints, and reliance on director loans to meet short-term obligations suggests some financial vulnerability.

2. Key Concerns:

• Liquidity Deficit: The company’s net current liabilities increased to £4,325 in 2023 from £1,325 in 2022, implying ongoing short-term liquidity pressure.
• Dependence on Director Funding: A large proportion (£14,878) of current liabilities is a director’s current account, evidencing reliance on insider funding rather than external financing or operational cash flow.
• Limited Operating History and Scale: Incorporated in late 2021, with no reported employees and minimal revenue details, raising questions about operational sustainability and growth prospects.

3. Positive Indicators:

• Improvement in Net Assets: Shareholders’ funds moved from negative £449 in 2022 to a positive £1,325 in 2023, showing some progress in financial stability.
• Fixed Asset Growth: Tangible fixed assets increased substantially from £876 to £5,650, potentially indicating investment in business capability or equipment supporting core activities.
• Compliance and Timely Filings: No overdue accounts or confirmation statements, showing adherence to statutory filing obligations.

4. Due Diligence Notes:

• Review underlying cash flow statements or management accounts to understand cash generation and projected liquidity needs.
• Investigate the nature and terms of director loans to assess sustainability and potential risks if funding ceases.
• Verify revenue streams and client contracts to evaluate the business model’s viability, especially given the company's SIC codes related to specialist photography and motion picture production.
• Clarify employment structure and capacity to deliver contracted services given zero reported employees.
• Confirm no undisclosed contingent liabilities or off-balance-sheet risks.