Company Number: 13128594

Analysis Date: 2025-07-20 14:59 UTC

1. Risk Rating: HIGH
   HZH PROPERTIES LTD exhibits significant solvency and liquidity concerns, primarily driven by consistently negative net current assets and substantial director loans classified as current liabilities. The company’s working capital position is weak, and cash holdings are minimal, raising questions about its ability to meet short-term obligations.

2. Key Concerns:

• Negative Net Current Assets: The company’s net current liabilities remain large (£47,211 in 2024), indicating potential liquidity strain. Current liabilities exceed current assets substantially, with cash balances under £1,000.
• Director Loans as Current Liabilities: Over £47,000 owed to directors with no formal repayment terms or interest noted, which may complicate creditor priority and raise concerns about informal financing arrangements.
• Lack of Operational Income & Employees: The company has no reported employees and no disclosed turnover, suggesting it may not be generating operational cash flow, relying instead on director financing and property valuation gains.

3. Positive Indicators:

• Increasing Net Assets and Revaluation Reserves: The company’s net assets improved to £66,789 in 2024 from a negative position in 2021, driven by revaluation gains on investment property (£29,000 gain in 2024). This indicates some asset value appreciation.
• Compliance with Filing Requirements: Both accounts and confirmation statements are filed on time, demonstrating regulatory compliance and good governance in reporting.
• Stable Ownership and Control: The three principal shareholders/directors appear to have stable control with no recent disqualifications or governance flags.

4. Due Diligence Notes:

• Examine Cash Flow & Income Generation: Investigate whether the company generates any rental or other income from its property holdings and how it services its liabilities.
• Clarify Director Loan Terms: Confirm the nature, repayment plans, and priority of director loans, and assess any potential risks if these loans are called in or if the company cannot repay.
• Review Property Valuation Basis: Validate the property revaluation approach, frequency, and market comparables used since these significantly impact net asset values.
• Assess Future Business Plan: Understand the company’s operational model and strategy given the lack of employees and turnover, to evaluate sustainability and prospects for profitability.