Company Number: 12733551

Analysis Date: 2025-07-29 20:51 UTC

1. Risk Rating: MEDIUM
   Justification: Lina Stores BA Limited demonstrates significant improvement in net assets and working capital over recent years, moving from negative net current assets in 2021 and 2022 to a positive £301,686 in 2023. However, the company holds minimal cash reserves (£6,605) relative to substantial short-term receivables (£1.42m), largely from related group undertakings, which may pose liquidity risks if these debts are not promptly collectible. The company is active, has timely filings, and no regulatory or governance issues are apparent.

2. Key Concerns:

• Liquidity Concentration in Debtors: The vast majority of current assets (£1.42m) are debtors owed by group companies, which could present collection risk and impact cash flow if intercompany balances are not settled on time.
• Low Cash Balances: Cash at bank is low (£6,605 in 2023), potentially limiting the company’s ability to meet immediate obligations without relying on debtor collections or intra-group support.
• High Current Liabilities: Current liabilities are significant (£1.14m), including trade creditors and amounts owed to group companies, necessitating careful cash flow management to avoid payment delays.

3. Positive Indicators:

• Improved Financial Position: Net assets increased markedly from £104,431 at the start of 2023 to £535,385 at year end, reflecting improved profitability or capital injections.
• Positive Net Current Assets: The company transitioned from a net current liability position in prior years to a comfortable net current asset surplus in 2023, indicating better short-term financial health.
• No Filing or Compliance Issues: All statutory accounts and confirmation statements are up to date with no overdue filings, suggesting management is compliant and responsive to regulatory requirements.

4. Due Diligence Notes:

• Investigate the nature and collectability of the debtors owed by group undertakings, including payment terms and the financial health of those group entities.
• Review cash flow forecasts and liquidity management practices to assess the company’s ability to meet short-term obligations without liquidity strain.
• Examine intercompany creditor balances for any risk of circular balances or dependency on group financial support.
• Assess the sustainability of the business model in the licensed restaurant sector, including any operational challenges or external risks.
• Confirm no director disqualifications or governance issues exist beyond the data provided.