Company Number: 13147965

Analysis Date: 2025-07-29 13:55 UTC

1. Risk Rating: MEDIUM

Justification: KLIC Home Ltd exhibits some liquidity challenges indicated by negative net current assets and reliance on director loans. However, it is an active, small private limited company with improving net assets and no overdue filings, which mitigates immediate solvency concerns.

2. Key Concerns:

• Liquidity Risk: The company has net current liabilities of £14,413 at 31 March 2024, worsening from £8,681 the prior year, and cash reserves declined from £109,762 to £72,471, indicating potential short-term cash flow strain.
• Reliance on Director Loans: Substantial loans to directors totaling over £176,000 (aggregate balances of £51,699, £81,582 and £43,417) are noted, which may complicate financial stability and raise questions about capital adequacy and funding sources.
• Negative Working Capital Trend: The increase in trade creditors and taxation/social security liabilities, combined with rising stocks and debtors, suggests operational cash conversion inefficiencies that could strain resources if not managed carefully.

3. Positive Indicators:

• Growing Net Assets: Net assets increased from £6,325 (2023) to £10,119 (2024), reflecting some retained earnings and modest improvement in financial position.
• No Overdue Filings: Both accounts and confirmation statements are filed on time, indicating sound governance and regulatory compliance.
• Stable Share Capital and Ownership: Share capital remains constant at £10,000 with identifiable significant control persons, providing ownership clarity.

4. Due Diligence Notes:

• Investigate the nature and terms of director loans, including repayment schedules, interest rates, and potential impact on cash flow and creditor priority.
• Review debtor aging and impairment provisions to assess collectability risks given the high debtor balances (£370,318).
• Examine stock composition and turnover to understand the increase in inventory and potential obsolescence risks.
• Assess the company's ability to manage creditor payments given rising current liabilities.
• Confirm no undisclosed contingent liabilities or off-balance-sheet obligations.
• Evaluate the impact of the recent director resignation (Dec 2024) on operational stability and governance.