MARYGATE (NO2) DEVELOPMENTS LIMITED

Executive Summary

Marygate (NO2) Developments Limited is an active private company engaged in building project development with a negative net asset position and significant intercompany debt. While short-term liquidity appears sufficient and directors confirm ongoing support, the company’s solvency depends heavily on continued group funding and realization of stock values. Investors should seek additional cash flow and related party debt details to fully assess financial stability and operational sustainability.

MARYGATE (NO2) DEVELOPMENTS LIMITED - Analysis Report

Company Number: 13801223

Analysis Date: 2025-07-29 17:24 UTC

1. Risk Rating: MEDIUM
   The company shows signs of financial strain with negative net assets and shareholder funds, indicating insolvency on a balance sheet basis. However, current assets closely match current liabilities, and directors have confirmed ongoing financial support, which mitigates immediate solvency risks.

2. Key Concerns:

• Negative Net Assets: The company reported net liabilities of £10,417 as of 28 February 2024, worsening from £3,692 the prior year, signaling erosion of equity and potential solvency issues.
• High Related Party Debt: Creditors due after one year consist entirely of amounts owed to group undertakings (£855,920), representing a significant external dependency and potential liquidity risk if intercompany support ceases.
• Capitalisation of Interest on Stocks: The company capitalizes interest costs on work-in-progress stocks (£63,123), which may obscure underlying profitability and cash flow challenges if these assets do not realize expected value.

3. Positive Indicators:

• Current Assets vs. Current Liabilities: Current assets (£854,764) slightly exceed current liabilities (£9,261), implying adequate short-term liquidity to meet immediate obligations.
• Directors' Going Concern Statement: Directors explicitly state a reasonable expectation to continue as a going concern supported by ongoing fund availability, suggesting management confidence and potential access to financial resources.
• No Overdue Filings: The company is current on both accounts and confirmation statement filings, indicating regulatory compliance and good governance in administrative matters.

4. Due Diligence Notes:

• Review the nature and terms of the intercompany debts due after more than one year, including repayment schedules, interest rates, and the financial strength of the group undertaking providing the funding.
• Assess the realizable value and liquidity of the stocks held (£836,522), especially considering the capitalized interest, to evaluate if these assets are likely to generate cash flows as expected.
• Examine cash flow statements and management forecasts (not provided) to understand operational cash generation and the timing of funding needs or potential refinancing risks.
• Verify any contingent liabilities or off-balance sheet exposures that may affect solvency or liquidity but are not disclosed in the summary accounts.
• Confirm no director disqualifications or governance issues beyond what is presented, particularly given the company’s financial position.