Company Number: 13636211

Analysis Date: 2025-07-29 12:43 UTC

1. Risk Rating: HIGH
   The company presents a high solvency risk due to significant current liabilities vastly exceeding current assets, resulting in large negative net current assets. This imbalance raises concerns about its ability to meet short-term obligations despite positive net assets.

2. Key Concerns:

• Severe Current Liabilities Imbalance: Current liabilities (~£5.6 million) dwarf current assets (_{£109k), producing negative net working capital (}-£5.49 million), signaling potential liquidity stress.
• Reliance on Related Party Debt: Over £5.3 million of interest-free loans from related undertakings constitute the majority of current liabilities. This reliance on intra-group funding may mask true liquidity issues and poses refinancing risk if support ceases.
• Limited Cash Resources: Cash on hand (£60,922) is minimal relative to liabilities, providing little buffer to cover immediate debts or operational expenses.

3. Positive Indicators:

• Substantial Fixed Assets: Tangible assets, primarily land and buildings valued at approximately £5.75 million, provide a strong asset base that exceeds net liabilities. This indicates potential collateral value and long-term stability.
• Growth in Net Assets: Net assets increased from £157,856 in 2023 to £256,311 in 2024, reflecting retained earnings and potentially improving profitability.
• Up-to-date Filings: No overdue accounts or confirmation statements, demonstrating regulatory compliance and good governance in filing obligations.

4. Due Diligence Notes:

• Examine Related Party Loans: Investigate terms, repayment schedules, and the sustainability of the interest-free loans from related parties to assess refinancing risk and impact on financial health.
• Assess Cash Flow Projections: Review management’s cash flow forecasts and liquidity management plans to understand how current liabilities will be serviced.
• Confirm Valuation of Tangible Assets: Verify the fair value estimation of investment properties and confirm their marketability and potential to generate income or be liquidated if necessary.
• Review Operational Income: Since full profit and loss data is not available (exempt under small company regime), seek supplementary information to evaluate revenue streams and operational sustainability.