Company Number: 13302109

Analysis Date: 2025-07-29 19:59 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency risk evidenced by persistent and increasing net liabilities (£-1.59m in 2024 vs. £-0.86m in 2023) and large long-term creditor obligations exceeding total assets less current liabilities. Liquidity concerns arise from negative net current assets and low cash balances relative to current liabilities. Despite being active and with recent filings up to date, the financial position suggests operational and financial stress.

2. Key Concerns:

• Substantial net liabilities and negative shareholders’ funds, indicating insolvency on a balance sheet basis.
• Large borrowings and secured debts (£5.6m+ after one year) with high interest rate (circa 9.99%), plus personal guarantees from directors, increasing financial risk exposure.
• Negative working capital (net current liabilities) and relatively low cash reserves (~£214k) against short-term creditors (~£802k), pointing to potential cash flow challenges.

3. Positive Indicators:

• The company remains active with no overdue statutory filings, indicating ongoing compliance and governance adherence.
• Directors have obtained shareholder support confirming financial backing for at least one year, which supports the going concern assumption.
• Tangible fixed assets remain significant (£4.18m net), providing some asset base that could support refinancing or restructuring efforts.

4. Due Diligence Notes:

• Investigate the terms and covenants of the secured loan and other creditor arrangements, particularly the implications of variable interest rates and personal guarantees.
• Review cash flow forecasts and management plans addressing the negative net current assets and liquidity position.
• Examine the business model and profitability trends (not disclosed here) to assess operational sustainability, including any impact of disposals and goodwill amortisation on financial health.
• Confirm the nature and enforceability of director and shareholder support commitments underpinning the going concern basis.