LARKSPUR GROUP LTD

Executive Summary

Larkspur Group Ltd is a recently incorporated recruitment agency showing early-stage financial strain with negative working capital and equity. However, the company remains compliant with filings and benefits from director support ensuring going concern status. Investors should focus on liquidity management and debtor quality to gauge near-term financial stability.

LARKSPUR GROUP LTD - Analysis Report

Company Number: 14858261

Analysis Date: 2025-07-29 19:54 UTC

1. Risk Rating: MEDIUM
   While Larkspur Group Ltd is an active company with current filings up to date, the financials reveal net current liabilities and negative shareholders’ funds after its first full year of trading. This indicates potential solvency and liquidity risk, although the directors affirm ongoing support and going concern status which partially mitigates immediate concerns.

2. Key Concerns:

• Negative Net Current Assets: The company’s current liabilities (£424,768) exceed current assets (£362,871) by approximately £61,897, indicating working capital deficiency and liquidity pressure.
• Negative Shareholders’ Funds: Equity stands at negative £33,277, reflecting accumulated losses or funding shortfalls which pose solvency risk.
• Concentration of Control: Two directors hold between 25-50% shares each and significant voting rights. While not unusual for a private startup, this concentration warrants monitoring governance and decision-making transparency.

3. Positive Indicators:

• Timely Compliance: No overdue filings for annual accounts or confirmation statements, demonstrating regulatory compliance and good governance discipline.
• Going Concern Statement: Directors explicitly state the company is a going concern supported by ongoing director support, which indicates confidence in operational continuity.
• Operational Scale: The company employs 25 people and operates in a recruitment sector (SIC 78200) that can scale with economic improvements.

4. Due Diligence Notes:

• Review detailed cash flow forecasts and director funding commitments to assess liquidity runway and timing of cash inflows/outflows.
• Investigate the nature and collectability of debtors (£351,000) to validate working capital quality.
• Monitor creditor composition including tax and social security liabilities to anticipate any regulatory or enforcement risks.
• Examine contracts and client concentration risks given the recruitment agency model.
• Evaluate director backgrounds and any potential conflicts given their significant control and equity stakes.