Company Number: 12690174

Analysis Date: 2025-07-29 15:16 UTC

1. Risk Rating: HIGH
   The company exhibits persistent negative net current assets and shareholders' funds over multiple years, indicating an ongoing solvency concern. The current liabilities consistently exceed current assets by a significant margin, and the company relies on a director's loan account for funding, which poses liquidity risks.

2. Key Concerns:

• Solvency Risk: The company has negative net assets for five consecutive years (e.g., -£14,163 at 30 June 2024), indicating liabilities exceed assets and potential insolvency risk.
• Liquidity Concerns: Current liabilities (£45,213) substantially exceed cash on hand (£15,513), and the working capital deficit (-£29,700) suggests potential cash flow constraints to meet short-term obligations.
• Dependence on Director Loan: The company owes the director £43,901 as an interest-free loan repayable on demand, reflecting reliance on related party financing rather than operational cash generation, which may hinder financial stability.

3. Positive Indicators:

• Active Status and Compliance: The company is active with no overdue filing of accounts or confirmation statements, showing regulatory compliance and good governance in statutory matters.
• Stable Director and Control: The company has a single director with 75-100% shareholding, which may facilitate swift decision-making and control.
• Tangible Fixed Assets: Presence of tangible fixed assets (£15,537) provides some asset backing, albeit insufficient to cover liabilities.

4. Due Diligence Notes:

• Investigate the nature and terms of the director’s loan and the company’s ability to repay or restructure this debt.
• Review the company’s operational cash flows and profitability trends, as the income statement was not provided; this is critical to assess sustainability.
• Evaluate contingent liabilities or off-balance sheet obligations that may exacerbate financial risks.
• Confirm whether any plans exist to improve working capital or inject additional equity to restore solvency.
• Examine industry conditions for SIC code 37000 (Sewerage) to assess market and operational risks.