MILLERS OF AYR LTD

Executive Summary

Millers Of Ayr Ltd shows a concerning financial position characterized by significant negative net assets and current liabilities, indicating high solvency and liquidity risks for a micro-entity. Despite compliance with filing deadlines and some apparent governance stability, the company's operational scale and working capital deficit raise substantial questions about its financial health. Further due diligence is recommended to clarify liabilities structure and management's recovery plans.

MILLERS OF AYR LTD - Analysis Report

Company Number: SC750408

Analysis Date: 2025-07-20 17:35 UTC

1. Risk Rating: HIGH
   Justification: The company exhibits significant and persistent negative net assets and net current liabilities, indicating an inability to meet short-term obligations from available current assets. The scale of negative equity relative to the micro-entity size signals serious solvency concerns.

2. Key Concerns:

• Severe Working Capital Deficit: Net current liabilities exceed £80,000 as of the latest year, which is substantial for a micro-entity with limited assets. This suggests cash flow stress and potential difficulty in settling immediate debts.
• Negative Shareholders' Funds: The company has reported net liabilities consistently over the last two years, worsening from approximately £92k negative to £81k negative, indicating ongoing losses or capital erosion.
• Limited Operational Scale and Resources: The company employs only one person on average, with minimal fixed assets, which may constrain revenue generation and recovery from the negative financial position.

3. Positive Indicators:

• Timely Filings and Compliance: There are no overdue accounts or confirmation statements, indicating adherence to regulatory requirements and good governance practices.
• Stable Director and Ownership Structure: The presence of three significant controllers with clear voting rights and directorial appointments suggests some degree of governance clarity.
• Recent Increase in Current Assets: Current assets rose from £2,049 to £29,850 in the latest year, which may indicate some improvement in liquidity or asset base, albeit still insufficient to cover liabilities.

4. Due Diligence Notes:

• Investigate the nature and terms of current liabilities to understand their composition (e.g., trade creditors, loans, accrued expenses) and assess risks of default or restructuring needs.
• Review cash flow statements and revenue generation capability, given the minimal staffing and asset base, to evaluate operational sustainability.
• Examine related party transactions or loans, especially given the involvement of family members as significant controllers and directors.
• Assess management plans or strategies to return the company to solvency, including capital injections or operational changes.
• Verify if there are any contingent liabilities or off-balance-sheet obligations not reflected in the accounts.