MR SPIRAL LTD

Executive Summary

MR SPIRAL LTD is facing significant financial distress characterized by increasing net liabilities and negative working capital, raising high solvency and liquidity risks. The company remains compliant with regulatory filings and has tangible asset investments, but sustained losses and reliance on related party loans highlight operational challenges. Further due diligence on related party financing and management’s turnaround plans is recommended to assess viability.

MR SPIRAL LTD - Analysis Report

Company Number: 12457369

Analysis Date: 2025-07-29 20:23 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity risks, evidenced by negative net current assets and net liabilities worsening over recent years. The scale of current liabilities compared to current assets and persistent losses indicate financial distress.

2. Key Concerns:

• Solvency Risk: The company reported net liabilities of £155,442 as at 31 March 2024, worsening from £72,431 the prior year. Total assets less current liabilities are negative, indicating liabilities exceed assets.
• Liquidity Concerns: Net current liabilities stand at £218,976, with current liabilities more than double current assets. Although cash increased to £76,286, it remains insufficient to cover short-term obligations of £398,197.
• Operational Stability: Despite ongoing operations and 13 employees, the company has incurred sustained losses over multiple years, reflected in increasingly negative reserves. The reliance on related party loans (£249,310 owed to McCulloughs Ltd) suggests external funding support to maintain operations.

3. Positive Indicators:

• The company is compliant with filing requirements, with no overdue returns or accounts, indicating good regulatory compliance and governance processes.
• Tangible fixed assets increased significantly to £118,389, reflecting recent investment in plant and equipment, which may support future operational capacity.
• The presence of a connected parent company (McCulloughs Holdings Limited) and related party support could provide financial backing or operational synergies.

4. Due Diligence Notes:

• Investigate the nature and terms of the related party loan from McCulloughs Ltd, including repayment schedules and whether it is ongoing or to be converted to equity.
• Review management plans or forecasts addressing the solvency issues and strategies to return to profitability.
• Assess the cash flow cycle, including debtor collection efficiency and creditor payment terms, to understand liquidity management.
• Evaluate the impairment risk and valuation of tangible assets, especially new additions, to determine asset recoverability.
• Confirm the status of any contingent liabilities or off-balance sheet commitments that could exacerbate financial pressure.