Company Number: 13241515

Analysis Date: 2025-07-20 11:15 UTC

1. Risk Rating: HIGH
   LSA Homes Ltd exhibits a concerning financial position marked by persistent net liabilities and negative shareholders’ funds. The latest accounts show net liabilities of £10,258 despite acquiring a significant investment property asset, indicating solvency challenges. The large current liabilities relative to current assets further heighten liquidity risk.

2. Key Concerns:

• Negative Net Assets & Shareholders' Funds: The company has consistently reported net liabilities from inception through the latest financial year, signaling ongoing capital erosion and solvency risk.
• High Current Liabilities vs. Current Assets: As of 31 March 2024, current liabilities (£371,578) significantly exceed current assets (£113,917), which raises immediate liquidity concerns and suggests potential difficulties in meeting short-term obligations.
• Loans and Creditors Concentration: The presence of substantial loans from directors (previous year) and significant bank loans and other creditors falling due after more than one year (£371,578) reveals dependence on related party funding and external debt, increasing financial leverage and risk.

3. Positive Indicators:

• Acquisition of Investment Property: The addition of an investment property asset valued at £248,123 in the latest year could provide a tangible asset base that might generate future income or be leveraged for financing.
• No Overdue Filings: The company is current with both accounts and confirmation statement filings, indicating compliance with statutory obligations and good governance on reporting timeliness.
• Stable Directorship: Both directors have been in place since incorporation with no indications of disqualification or governance issues, supporting continuity in management.

4. Due Diligence Notes:

• Examine Terms and Security of Loans: Investigate the nature and terms of director loans and bank loans, including interest rates, repayment schedules, and any security interests against company assets.
• Assess Cash Flow and Income Generation: Determine the company’s ability to generate operating cash flows sufficient to service liabilities, especially given no reported employees and the nature of investment property income.
• Review Related Party Transactions: Scrutinize any transactions between the company and its directors or related entities to assess risk of preferential treatment or financial support masking true financial health.
• Understand the Business Model: Clarify how the company operates within its SIC code 68209 (Other letting and operating of own or leased real estate), including tenant status, rental income reliability, and market conditions affecting property values.