KITCHEN MAGIC LIMITED

1. Risk Rating: LOW

Justification: Kitchen Magic Limited demonstrates strong financial stability with a robust cash position (£2.8 million), consistent year-on-year growth in net assets over a 10-year period, and a long operating history dating back to 1987. The company comfortably meets its short-term obligations, and all statutory filings are up to date.

2. Key Concerns

• Concentrated Ownership and Key-Person Risk: Xxxxxx Xxxxxxxxname shown to subscribers is listed as the Person with Significant Control (owning more than 75% of shares and voting rights), a current director, and the company secretary. This high level of control concentration presents a key-person risk and a lack of independent board oversight.
• Increase in Current Liabilities: Short-term creditors have risen significantly from £2.36 million in 2024 to £3.21 million in 2025. While current assets (£4.79 million) comfortably cover this, the 36% increase in liabilities over a single period warrants monitoring to ensure it does not reflect strained supplier terms or deferred operational expenses.
• Officer Data Anomaly: One of the officer listings for Xxxxxx Xxxxxxxxname shown to subscribers includes the designation "ADMINISTRATOR" alongside "DIR". As the company status is "Active" and not flagged as being in administration, this anomaly requires clarification to rule out any undisclosed governance issues or data errors at Companies House.

3. Positive Indicators

• Exceptional Liquidity: The company holds £2.8 million in cash at bank and in hand, which alone covers approximately 87% of its current liabilities. The current ratio stands at a healthy 1.49.
• Consistent Equity Growth: Net assets/shareholders' funds have grown steadily from £739,646 in 2016 to £2,600,506 in 2025. Retained earnings increased by approximately £503,000 in the latest reporting period (a 13-month period ending April 2025), indicating sustained profitability without the need for external equity injections.
• Operational Longevity and Compliance: Incorporated in 1987, the business has nearly four decades of trading history. Both the annual accounts and confirmation statements are filed and up to date, with no overdue flags.

4. Due Diligence Notes

• Clarify Officer Title: Investigate the "ADMINISTRATOR" designation attached to Xxxxxx Xxxxxxxxname shown to subscribers in the officer records to ensure it is merely an administrative data entry quirk rather than an indicator of formal insolvency proceedings elsewhere.
• Composition of Current Liabilities: As the company files under the small companies regime (with the income statement omitted), it would be prudent to request internal management accounts to break down the £3.21 million in current liabilities. Specifically, assess the proportion of trade payables versus accrued expenses or deferred income.
• Succession Planning: Given the concentrated control by Xxxxxx Xxxxxxxxname shown to subscribers, institutional investors should inquire about succession planning and the strategic roles of the other five directors to understand the long-term operational continuity of the business.

Names of the people mentioned are shown to subscribers. See subscription