Company Number: 14175239

Analysis Date: 2025-07-19 12:25 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns with negative net assets and substantial current liabilities exceeding current assets by a large margin. The financial data indicates ongoing losses and insufficient cash resources relative to short-term obligations.

2. Key Concerns:

• Negative Net Assets and Shareholders’ Funds: The company reported net liabilities of £15,482 as of 30 June 2024, worsening from £3,004 the prior year, indicating an erosion of equity and potential solvency risk.
• Severe Working Capital Deficit: Net current liabilities stand at £584,188 with cash on hand of only £687, suggesting critical liquidity constraints and difficulty meeting short-term obligations.
• Heavy Debt Burden Secured Against Assets: Bank loans totaling over £700k are secured against the company’s investment property valued at £1.275 million, implying leverage risk and potential asset encumbrance that could complicate refinancing or creditor negotiations.

3. Positive Indicators:

• Investment Property Valuation Stable: The investment property held at £1.275 million is carried at fair value with no impairment from the prior year, providing a tangible asset base backing the company’s liabilities.
• No Overdue Filings and Compliance Maintained: The company is active, with up-to-date accounts and confirmation statements, reflecting regulatory compliance and reasonable governance.
• Directors’ Financial Support Affirmed: The directors have stated continued financial support, and accounts prepared on a going concern basis, which may mitigate immediate insolvency risk.

4. Due Diligence Notes:

• Examine the Terms and Covenants of Bank Loans: Confirm repayment schedules, interest rates, and any restrictive covenants that may trigger default or accelerate repayments.
• Review Directors’ Plans and Cash Flow Projections: Assess management’s strategy to improve liquidity, reduce liabilities, or inject capital to restore solvency.
• Investigate the Quality and Marketability of Investment Property: Validate the valuation methodology and market conditions to understand the realizable value of assets under distress scenarios.
• Clarify the Nature of ‘Other Creditors’: The large amount of other creditors within current liabilities requires scrutiny to understand payment terms and potential contingent liabilities.