Company Number: 13910982

Analysis Date: 2025-07-20 16:57 UTC

1. Credit Opinion: DECLINE

Lighthouse Retreat Ltd demonstrates significant financial distress with large net current liabilities and a net deficit in shareholders’ funds. The company’s current liabilities have increased substantially to over £2.1 million, far exceeding its current assets of just £3,585, causing a severely negative working capital position (-£2.14 million). Despite owning tangible fixed assets valued at over £2.1 million, the company’s total net assets remain negative (£-15,361), indicating the liabilities outweigh assets. The company relies heavily on amounts owed to group undertakings (£2.1 million), suggesting dependence on intra-group financing rather than independent cash generation. Given the scale of liabilities, negative net assets, and lack of positive cash flow, the company currently lacks the financial capacity to service external debt or meet commercial obligations without further support.

2. Financial Strength:

The balance sheet reveals a weak financial structure. Tangible fixed assets have increased year-on-year (from £1.52 million to £2.12 million), likely reflecting ongoing investment or asset acquisition. However, these assets are offset by current liabilities of £2.14 million, mostly owed to related group companies, which raises concerns about the sustainability of the company’s capital structure. The company’s net liabilities and shareholders deficit indicate negative equity and no buffer to absorb losses. There is no depreciation recorded, implying assets are still in construction or not yet generating returns. Overall, the balance sheet signals limited financial resilience and high leverage within group financing arrangements.

3. Cash Flow Assessment:

Cash at bank has declined drastically from £118,174 in 2023 to just £1,457 in 2024, indicating severe liquidity constraints. Current assets are minimal and primarily comprise low-value debtors (£2,128), which are unlikely to be quickly convertible to cash. The company exhibits a negative net current asset position of over £2 million, illustrating an inability to cover short-term liabilities from liquid resources. The dependency on intra-group balances to fund operations suggests external liquidity and working capital support are insufficient. This poor liquidity position raises concerns about the company’s ability to meet immediate payment obligations without further financial backing.

4. Monitoring Points:

• Monitor ongoing support from Yoo Retreats Limited, the controlling shareholder, as the company’s going concern status depends on this related party funding.
• Watch for improvements in liquidity and working capital, specifically cash balances and reduction of current liabilities.
• Review any asset impairment risks related to the large tangible assets under construction, as delays or write-downs could worsen solvency.
• Track operating performance and cash flow generation once asset investments become operational to assess potential for financial recovery.
• Keep watch for any overdue filings or director changes indicating governance or operational issues.