Company Number: 12646751

Analysis Date: 2025-07-29 18:47 UTC

1. Risk Rating: MEDIUM
   The company's solvency position has deteriorated notably in the latest financial year with shareholders' funds nearly halving from approximately £79.7k in 2023 to £37.7k in 2024. Current liabilities have increased significantly, outpacing growth in current assets, which reduces net current assets and signals potential liquidity stress. However, the company remains active with no overdue filings and a positive net asset position.

2. Key Concerns:

• Sharp increase in current liabilities from £36.9k (2023) to £111.9k (2024) without a commensurate increase in current assets, diminishing liquidity and working capital buffer.
• Decline in net current assets from £65k to £15k in one year, indicating potential cash flow constraints or rising short-term obligations.
• Significant reduction in total equity/shareholders' funds, suggesting operating losses or capital erosion that could impact financial stability.

3. Positive Indicators:

• Company remains compliant with statutory filing deadlines (accounts and confirmation statements up to date), indicating good governance and regulatory compliance.
• The business has maintained positive net assets throughout its operating history, indicating solvency on a balance sheet basis.
• The presence of a director with Chartered Accountant credentials may imply competent financial management oversight.
• The company operates under micro-entity reporting provisions, reducing administrative burden and costs.

4. Due Diligence Notes:

• Investigate the nature and drivers of the large increase in current liabilities in 2024, including whether this is due to accrued expenses, short-term borrowings, or trade payables.
• Review profit and loss accounts to assess profitability trends, identify causes for equity decline, and evaluate sustainability of operations.
• Confirm the company’s cash flow position and forecast to determine if liquidity issues are short-term or structural.
• Assess the impact of the resignation of the original director (appointed 2020, resigned 2022) and any changes in management or ownership structure.
• Clarify whether there are any contingent liabilities or off-balance-sheet risks not disclosed in the micro-entity accounts.