Company Number: 13786463

Analysis Date: 2025-07-20 17:29 UTC

1. Risk Rating: HIGH

Justification: The company exhibits significant solvency concerns indicated by negative shareholders' funds and net assets, coupled with a large amount of long-term liabilities relative to fixed assets. The extremely low current assets compared to current liabilities further suggests liquidity stress. Although the company is active and up to date on filings, the financial position points to financial instability.

2. Key Concerns:

• Negative Equity and Net Assets: The company’s net assets have declined from £8,578 in 2022 to a negative £389 in 2023, indicating erosion of shareholder value and potential insolvency risk.
• High Creditors Compared to Assets: Current liabilities of approximately £610k far exceed current assets (less than £5k), resulting in a large negative working capital position. This raises serious liquidity issues and questions the company’s ability to meet short-term obligations.
• Significant Long-Term Borrowings: Creditors due after more than one year stand at £610,563, almost equal to fixed assets, implying heavy leverage and potential financial strain if cash flow is insufficient to service debt.

3. Positive Indicators:

• Up to Date Compliance: The company is current on its accounts and confirmation statement filings, indicating good regulatory compliance and governance adherence.
• Stable Fixed Assets: Fixed assets remain consistent at £881,273 over the years, providing some asset backing to creditors and potential for recovery value if needed.
• Small Employee Base: With only 2 employees, operational costs may be low, potentially easing cash flow pressures if revenues are sufficient.

4. Due Diligence Notes:

• Review Debt Structure: Investigate nature and terms of the £610k long-term creditors to assess repayment obligations and any covenant risks.
• Examine Cash Flow and Revenue: Obtain cash flow statements and profit & loss data to understand operational sustainability and ability to service debts.
• Assess Fixed Assets Valuation: Verify that fixed assets are realizable at stated values or if impairment is necessary.
• Understand Business Model and Market Conditions: Given SIC code 68100 (buying and selling own real estate), check for property market exposure and valuation risks.
• Director Backgrounds and Related Party Transactions: Confirm no director disqualifications or conflicts and review any loans or guarantees provided by directors or related parties.