Company Number: 13063529

Analysis Date: 2025-07-20 11:35 UTC

1. Risk Rating: MEDIUM
   The company shows a significant level of secured debt relative to its assets and net current liabilities are substantially negative, indicating liquidity constraints. However, positive net assets and recent revaluation gains on investment properties provide some solvency comfort.

2. Key Concerns:

• Liquidity Risk: Net current liabilities are negative by approximately £294k (2023), worsening from prior years, suggesting potential difficulties meeting short-term obligations. Cash balances have also decreased significantly from £12,963 in 2022 to £2,648 in 2023.
• High Leverage: Total creditors due after one year increased to £1.45m in 2023 from £1.0m in 2022, with secured loans representing a substantial portion tied to property assets. This level of gearing could pose refinancing or covenant risks if cash flows weaken.
• Related Party Borrowings: The company has significant related party loans (£639k) from directors without formal security or repayment terms yet established, which may pose governance and risk concerns for outside investors.

3. Positive Indicators:

• Increasing Asset Base: Investment property increased in value from £1.27m to £1.76m in 2023, with revaluation gains recognized, supporting the asset backing.
• Equity Growth: Despite losses in reserves, shareholder funds rose to £110,919 in the fair value reserve, reflecting appreciation in property values.
• Compliance: The company is actively filing accounts and confirmation statements on time, indicating regulatory compliance and management diligence.

4. Due Diligence Notes:

• Review cash flow projections and debt servicing capacity to assess liquidity sustainability.
• Verify the valuation methodology and market comparables used for property revaluations, considering no professional external valuation was obtained.
• Examine the terms, interest rates, and repayment plans of director-related loans and assess potential conflicts of interest or risks.
• Investigate the nature of long-term creditors and any covenants attached to the secured loans.
• Confirm absence of contingent liabilities or pending litigation that could impact financial position.