KINGSLEY DSM LIMITED

Executive Summary

Kingsley DSM Limited shows significant liquidity and solvency risks driven by negative working capital and high long-term indebtedness relative to equity. While the company maintains a stable fixed asset base and complies with filing obligations, the financial structure indicates cash flow pressures and reliance on asset revaluations. Careful scrutiny of cash flows, debt terms, and operational profitability is recommended to assess financial sustainability.

KINGSLEY DSM LIMITED - Analysis Report

Company Number: 13353817

Analysis Date: 2025-07-20 17:19 UTC

1. Risk Rating: HIGH
   Kingsley DSM Limited exhibits a high risk profile primarily due to significant negative net current assets (working capital deficits) and substantial long-term liabilities relative to its equity base. The company's current liabilities far exceed its current assets, indicating liquidity stress and potential challenges in meeting short-term obligations.

2. Key Concerns:

• Liquidity Deficit: The company has net current liabilities of £225,822 as of April 2024, with cash balances of only £6,468. This suggests potential cash flow constraints to cover imminent liabilities.
• High Long-Term Debt: Creditors due after more than one year stand at approximately £950,570, which is large relative to the net assets (£53,556). This leverage ratio may strain solvency if income is insufficient to service debt.
• Negative Retained Earnings: The profit and loss reserve is negative (£11,961), indicating accumulated losses. While the revaluation reserve bolsters equity, the underlying operations may not be profitable or generating retained earnings.

3. Positive Indicators:

• Revaluation Reserve Presence: The company holds a revaluation reserve of £65,417, supporting shareholders’ funds and indicating some asset value enhancement.
• Stable Tangible Assets: Fixed assets (freehold property) maintain a consistent carrying value of £1,229,948, suggesting stable asset base without impairment.
• Timely Compliance: The company is current with both accounts and confirmation statement filings, reflecting regulatory compliance and governance diligence.

4. Due Diligence Notes:

• Cash Flow Analysis: Verify detailed cash flow statements to assess operating cash generation and the ability to meet short-term liabilities despite working capital deficits.
• Debt Structure: Examine terms of the long-term bank loans (£950k+), including interest rates, covenants, maturity profiles, and any refinancing risks.
• Profitability and Business Model: Investigate revenue streams and operational performance given negative retained earnings, to evaluate sustainability and prospects for profit improvement.
• Asset Valuation: Confirm the basis and frequency of property revaluation, and whether asset values realistically support the balance sheet and debt levels.