Company Number: 13765060

Analysis Date: 2025-07-19 11:52 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns. Despite holding investment property valued at approximately £930k, current liabilities far exceed current assets, resulting in a large negative working capital of over £500k. Total liabilities, including long-term creditors, are substantially higher than net assets, indicating ongoing funding pressure.

2. Key Concerns:

• Severe liquidity shortfall: Cash balance is minimal (£10k) compared to high current liabilities (£516k), and net current assets are deeply negative (-£506k), indicating difficulty meeting short-term obligations.
• Heavy debt burden: Total creditors beyond one year remain substantial (£406k), with significant loans and overdrafts, including £470k owed to a related party, suggesting reliance on intra-group support and potential refinancing risk.
• Minimal net equity: Net assets and shareholder funds are very low (£17k), showing limited capitalization and minimal cushion against financial distress.

3. Positive Indicators:

• Investment property asset: The company holds a sizeable investment property valued at £929,886, which may provide collateral value and potential for future capital appreciation or rental income.
• Compliance with filings: No overdue accounts or confirmation statements, indicating good regulatory compliance and governance discipline to date.
• Stable staffing: Maintains a small, steady workforce of two employees, consistent with business support service activities and controlled cost base.

4. Due Diligence Notes:

• Investigate the nature and terms of the significant loans and creditor balances, especially the £470k owed to related party, to assess repayment obligations and risks.
• Review cash flow forecasts to determine the company’s ability to meet upcoming liabilities and sustain operations without additional funding.
• Validate the investment property valuation and marketability to understand its liquidity and potential to support solvency.
• Confirm the absence of director or governance issues, including any director disqualifications or related party transaction concerns.
• Ascertain the company’s revenue generation capacity and business model sustainability given the negative working capital and overall financial position.