Company Number: 12645738

Analysis Date: 2025-07-20 14:41 UTC

1. Risk Rating: MEDIUM
   Kaizen Reece Group Ltd shows a mixed financial picture with improved net assets in 2024 but significant reliance on debt and low cash balances, indicating moderate solvency and liquidity risks. The company remains active with timely filings and no governance flags.

2. Key Concerns:

• High Debtors and Low Cash: Debtors constitute the majority of current assets (£118k vs. £206 cash), suggesting potential cash flow constraints if receivables are not collected promptly.
• Significant Long-Term Creditors: Creditors due after one year stand at £47.7k, nearly double the current liabilities, indicating medium-term debt obligations that require sustained operational cash flow.
• Fluctuating Net Assets: The company moved from negative net assets in 2021 to positive in 2024, but the large swing is driven by changes in creditor balances rather than operational growth, highlighting potential volatility.

3. Positive Indicators:

• Timely Financial and Confirmation Filings: No overdue accounts or confirmation statements, demonstrating regulatory compliance and governance discipline.
• Consistent Directors and PSCs: Stable management with two directors owning significant shares and voting rights, reducing governance risk.
• Small Operational Footprint: Only one employee and modest fixed assets, which may indicate lean operational costs.

4. Due Diligence Notes:

• Investigate the composition and collectability of the debtor balance (£118k) to assess cash flow reliability.
• Clarify the nature of long-term creditors and repayment terms to understand solvency pressures.
• Review trends in creditor balances that caused net assets to fluctuate significantly between 2023 and 2024.
• Confirm if the company’s activities as a holding company generate sustainable income streams to service debts.