KISSOUS LLP

Executive Summary

Kissous LLP demonstrates a solid asset base primarily through investment property but carries a substantial long-term loan that poses solvency and liquidity risks given limited cash reserves. The LLP maintains regulatory compliance with timely filings, yet the absence of an income statement and audit restricts analysis of operational performance. Further due diligence is recommended to clarify cash flow adequacy, loan terms, and asset valuations before investment consideration.

KISSOUS LLP - Analysis Report

Company Number: OC434152

Analysis Date: 2025-07-29 20:07 UTC

1. Risk Rating: MEDIUM

Justification: Kissous LLP holds significant fixed assets in investment property valued at £450,000, supported by revaluation reserves of £150,000, which strengthens its asset base. However, the LLP carries a substantial long-term bank loan of approximately £278,000, with relatively low cash balances (~£5,800) and minimal current liabilities (~£2,800), suggesting limited liquid resources to cover short-term obligations. The net current assets are positive but modest (~£3,000), indicating some liquidity but potential vulnerability to short-term cash flow stress. The LLP's financial statements are unaudited and prepared under the small LLPs regime, which limits transparency.

2. Key Concerns:

• High leverage: Long-term borrowing of £278,135 against total assets of approximately £453,000 represents a significant debt burden, which could strain solvency if asset values decline or income generation falters.
• Low liquidity: Cash holdings are minimal relative to liabilities, which may challenge the LLP’s ability to meet immediate payment obligations or absorb operational shocks.
• Lack of audit and limited disclosure: Accounts are unaudited, and the LLP regime exempts it from delivering an income statement, reducing insight into profitability, cash flows, or operational performance.

3. Positive Indicators:

• Stable asset base: Investment property valued consistently at £450,000 provides a tangible, appreciating asset underpinning net worth.
• Positive net current assets: Although small, net current assets remain positive, indicating working capital is currently sufficient to cover short-term liabilities.
• Compliance with filings: No overdue accounts or confirmation statements are noted, suggesting the LLP is maintaining regulatory compliance.

4. Due Diligence Notes:

• Investigate income generation and cash flow: Since the income statement is not filed, understanding the LLP’s revenue streams, profitability, and cash flow patterns is essential.
• Review terms of the bank loan: Assess repayment schedule, interest rates, covenants, and potential refinancing risks impacting financial stability.
• Verify valuation of investment property: Confirm the basis and independence of the £450,000 valuation and potential market risks.
• Examine member loans and capital accounts: Clarify the nature of members’ loans (£26,984) and capital account fluctuations to evaluate financial support and equity stability.
• Assess operational model: Understand why average employees dropped to zero, and implications for business continuity and revenue generation.