Company Number: 13562303

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

1. Risk Rating: HIGH

Justification: The company exhibits significant liquidity risk evidenced by a large negative net current assets position (circa -£150k) against minimal current assets (~£3k) and substantial current liabilities (~£153k). The total liabilities, including long-term debt (~£392k), greatly exceed shareholder funds (£35k), indicating high leverage and thin equity buffer.

2. Key Concerns:

• Liquidity strain: The company holds only £1,546 in cash against current liabilities of £153,718, suggesting potential difficulty meeting short-term obligations.
• Heavy reliance on secured long-term debt: £392,103 bank loans secured against investment property create high leverage and interest obligation risks at 5.24% annual rate.
• Negative working capital: Consistent negative net current assets over 4 years indicate persistent short-term funding gaps that may threaten operational continuity if not managed.

3. Positive Indicators:

• Increasing net assets: Net assets improved from £2,675 in 2021 to £35,401 in 2024, primarily driven by revaluation reserves on investment properties.
• Investment property appreciation: The investment property portfolio increased in value by approx. £27,783 in 2024, reflecting potential asset value growth.
• Compliance and governance: The company is active with up-to-date filings for accounts and confirmation statements, indicating adherence to regulatory requirements.

4. Due Diligence Notes:

• Verify the valuation methodology and market comparables used by directors for investment property revaluations to confirm asset quality and realism.
• Assess the company's cash flow projections and debt servicing capacity given high interest costs and large loan balances with long maturities.
• Review any contingent liabilities or provisions (noted £5,279 in 2024) that could further impact solvency.
• Examine the extent of any related party transactions or director loans that might affect financial health.
• Confirm that the director's going concern assessment is supported by robust underlying assumptions given liquidity pressures.