Company Number: 13639163

Analysis Date: 2025-07-29 13:40 UTC

1. Risk Rating: HIGH
   The company exhibits a high solvency risk due to the disproportionate level of current liabilities relative to current assets and a very large long-term creditor balance. Despite positive net current assets reported, the overall financial structure shows a significant creditor burden far exceeding equity and cash resources.

2. Key Concerns:

• Excessive Long-Term Creditors: Non-current liabilities are approximately £2.98 million against net assets of only £32,271, indicating heavy reliance on debt financing with limited equity buffer.
• Liquidity Mismatch: While cash of nearly £496k is substantial, current liabilities are reported at £2.98 million, which suggests potential timing or classification issues needing clarity but also points to liquidity strain.
• Low Equity and Thin Profitability: Shareholders' funds have only just turned positive from a negative £110k in the prior year, reflecting minimal retained earnings and possibly thin operating margins or insufficient profitability.

3. Positive Indicators:

• Stable Investment Property Valuation: Fixed assets in investment property remain steady at £2.65 million, providing a tangible asset base and potential for rental income.
• No Overdue Filings: The company complies with Companies House filing deadlines for accounts and confirmation statements, indicating good regulatory compliance.
• Experienced Directors: The presence of three directors with defined roles and no adverse records suggests stable governance.

4. Due Diligence Notes:

• Review the nature and terms of the £2.98 million long-term creditors to assess repayment schedules, interest rates, and covenants.
• Clarify the classification of current liabilities since the notes disclose only £142k current creditors but the financial summary shows £2.98 million current liabilities, indicating possible reporting inconsistencies.
• Examine the company's cash flow statements and income statement (not included) to evaluate operational cash generation and profitability trends.
• Confirm the rental income reliability and occupancy rates of the investment properties to assess sustainability of asset-backed earnings.
• Investigate any contingent liabilities or off-balance-sheet obligations that may affect financial stability.