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.