Company Number: 13886969

Analysis Date: 2025-07-20 16:47 UTC

1. Risk Rating: HIGH
   Justification: The company shows significant negative net assets (£-27,261) and a large working capital deficit (£-33,139) as at 31 July 2024. Current liabilities (£40,766) substantially exceed current assets (£7,627), indicating liquidity stress. The financial trend from 2023 to 2024 reveals a deterioration from positive net assets and net current assets to significant negative values, suggesting solvency concerns.

2. Key Concerns:

• Solvency Risk: The company’s net liabilities and negative shareholders’ funds imply it is technically insolvent on a balance sheet basis.
• Liquidity Issues: A large shortfall in net current assets (-£33,139) with current liabilities over five times the cash balance (£2,650) points to potential difficulties meeting short-term obligations.
• Financial Deterioration: The sharp decline from positive net assets and net current assets in 2023 to deep negatives in 2024 raises questions about operational performance and sustainability.

3. Positive Indicators:

• Filing Compliance: Accounts and confirmation statement filings are up to date with no overdue returns, indicating management adherence to regulatory requirements.
• Clear Ownership and Governance: Two directors with significant control are identified, both resident in England, which simplifies accountability and oversight.
• Small Company Exemption Use: The company is making use of exemptions applicable to small companies, suggesting it remains within regulatory thresholds.

4. Due Diligence Notes:

• Investigate Causes of Financial Decline: Review management accounts, cash flow statements, and contract/project performance to understand operational losses or exceptional items leading to losses.
• Examine Creditors Composition: The large "Other creditors" balance (~£40k) warrants scrutiny to clarify creditor identity, payment terms, and risk of enforcement actions.
• Assess Going Concern Assumptions: Given the negative net assets and liquidity constraints, confirm whether directors have made any going concern disclosures or have plans for financial restructuring or capital injection.
• Review Contract Revenue Recognition: Given the construction SIC code and turnover recognition policies, verify the reliability of contract estimates and revenue recognition to rule out aggressive accounting.
• Confirm No Auditor Oversight: Although small company audit exemption applies, consider whether an independent audit or review might be warranted given financial stress.