Company Number: 13018579

Analysis Date: 2025-07-20 12:40 UTC

1. Risk Rating: MEDIUM
   The company shows a strong asset base primarily in fixed assets (property), but its high level of long-term liabilities and relatively low current assets raise concerns about liquidity and solvency. The absence of audit and limited disclosure typical of a micro-entity means less transparency.

2. Key Concerns:

• High Long-Term Debt: The company has significant secured loans (£3.54 million) against its properties, which represents a substantial financial obligation relative to shareholders’ funds (£1.82 million). This leverage increases solvency risk should property values decline or income streams weaken.
• Low Current Assets vs. Current Liabilities: Current assets are modest (£71,678) compared to current liabilities (£18,171), though net current assets remain positive. Limited working capital could stress short-term liquidity, especially if receivables or cash inflows are delayed.
• Lack of Audit and Detailed Financial Information: As a micro-entity, the company is exempt from audit, which limits the depth of financial scrutiny. This constraint reduces visibility into operational performance, cash flows, and risk exposures.

3. Positive Indicators:

• Asset-Backed Business Model: The company’s primary activity is letting and operating own or leased real estate, supported by substantial fixed assets valued over £5.3 million, providing tangible collateral and potential income generation.
• Consistent Shareholders’ Funds: Equity has remained relatively stable over recent years (~£1.8 million), indicating no rapid erosion of net worth.
• Timely Filing Compliance: The company is up to date with its statutory accounts and confirmation statements, reducing regulatory compliance risk.

4. Due Diligence Notes:

• Review the terms and covenants of the secured loans and any potential refinancing risks or upcoming maturities.
• Assess rental income streams, occupancy rates, and cash flow statements (if available) to evaluate operational sustainability and liquidity under stress scenarios.
• Investigate any contingent liabilities or off-balance sheet obligations not disclosed in micro-entity filings.
• Confirm the directors’ and management’s experience in property management and financial strategy.
• Obtain or request management accounts or internal reports for a clearer picture of trading performance and cash flow dynamics.