Company Number: NI678722

Analysis Date: 2025-07-29 19:50 UTC

1. Risk Rating: HIGH

Justification: The company shows a minimal net asset value (£100) despite holding substantial tangible assets (£3.85M) and large current assets, which are heavily skewed towards debtors owed by group undertakings (£4.72M). Current liabilities and long-term borrowings are significantly high (£8.31M within one year and £8.31M after one year), indicating a very leveraged position and potential solvency risk due to concentrated intra-group debts and high creditor balances.

2. Key Concerns:

• Solvency Risk: Net assets equal to share capital (£100) with total liabilities exceeding £8M suggests the company is highly leveraged and may struggle to meet obligations without group support.
• Liquidity Concerns: Cash on hand is very low (£24,455), while debtors are almost entirely amounts owed by group undertakings, raising concerns about the collectability and liquidity of these receivables.
• Reliance on Group Transactions: Large debtor and creditor balances relate to group companies, possibly indicating operational dependence and risk of financial distress if group entities underperform.

3. Positive Indicators:

• Regular and timely filing of accounts and confirmation statements with no overdue filings, indicating regulatory compliance.
• Auditor’s report is unqualified, suggesting financial statements fairly present the company’s position.
• Tangible fixed assets remain stable and significant, providing some asset backing.

4. Due Diligence Notes:

• Investigate the nature and collectability of amounts owed by group undertakings (£4.72M) to assess credit risk and liquidity.
• Review terms and conditions of the bank loans (£8.31M) and intra-group borrowings to understand repayment schedules and covenants.
• Assess the financial health and operational viability of the wider group to evaluate the risk of contagion.
• Confirm whether the company benefits from any guarantees or support agreements within the group given the minimal equity base.
• Understand the business model and cash flow generation capabilities beyond intra-group transactions.