Company Number: 12999657

Analysis Date: 2025-07-20 11:54 UTC

1. Risk Rating: MEDIUM
   Lower Lights Limited shows solid net asset backing and consistent financial position over recent years. However, a significant element of liabilities falls due after one year, and the company carries a negative profit and loss reserve, indicating accumulated losses. The low cash balance relative to current liabilities and the large debtor balance concentrated with one party may present liquidity and credit risk.

2. Key Concerns:

• Concentration of Debtors: £440,000 in debtors consistently reported, implying reliance on a single or few customers; risk if payments are delayed or defaulted.
• Negative Profit and Loss Reserve: The accumulated losses of approximately £15,000 suggest ongoing operational losses or insufficient profitability to build retained earnings.
• Long-Term Creditors: Large balance (£413,565) of creditors falling due after one year, which may represent loans or other borrowings requiring scrutiny for repayment terms and covenant risks.

3. Positive Indicators:

• Stable Net Assets: Net assets around £425,000 with shareholders’ funds fully covering net assets, indicating the company is not insolvent.
• Consistent Filing and Compliance: Accounts and confirmation statements are filed on time with no overdue reports or compliance issues.
• Tangible Fixed Assets: Ownership of land and property valued near £393,000 provides tangible security and asset base.

4. Due Diligence Notes:

• Review the nature and collectability of the large debtor balance; confirm counterparties and payment history.
• Analyze the terms and conditions of the long-term creditors, including repayment schedules and any security interests.
• Examine the company’s cash flow forecasts and working capital management given the low cash holdings.
• Investigate the cause of accumulated losses and assess profitability trends and business sustainability.
• Confirm the identity and role of the shareholders given no persons with significant control are listed publicly.