NMA QUAGLIETTA LIMITED

Executive Summary

NMA Quaglietta Limited is an asset-backed property company with improving net asset value driven by property revaluation but faces liquidity challenges evidenced by significant negative net current assets and large short-term liabilities. While regulatory compliance is maintained and asset values appear solid, the company’s substantial secured debt and retained earnings deficit warrant further scrutiny of cash flow and related party transactions. Investors should undertake detailed due diligence on operational cash generation and creditor arrangements to fully assess solvency risk.

NMA QUAGLIETTA LIMITED - Analysis Report

Company Number: 12871876

Analysis Date: 2025-07-29 20:42 UTC

1. Risk Rating: MEDIUM

Justification: The company holds substantial investment property assets valued at £790,000 with a corresponding mortgage of £435,551, indicating significant leverage. While net assets have improved from £55,161 in 2023 to £101,335 in 2024, the company consistently shows large negative net current assets (~ -£220,000), reflecting liquidity concerns. The company remains active and compliant with filing requirements, which mitigates some governance risks.

2. Key Concerns:

• Negative net current assets: Current liabilities (~£231,776 short-term creditors plus £435,551 mortgage) far exceed current assets (£11,832), indicating potential short-term liquidity stress.
• Significant secured debt: The mortgage liability of £435,551 represents a considerable long-term obligation secured against investment property, increasing solvency risk if property values decline or rental income falters.
• Retained earnings deficit: Despite improved net assets, the company maintains negative retained earnings (£-16,447), suggesting historical operating losses or distributions exceeding profits, which may impact financial resilience.

3. Positive Indicators:

• Increasing net assets and shareholders’ funds: Net assets nearly doubled in the latest year, supported by a £60,000 revaluation uplift of investment property, reflecting appreciation of underlying asset values.
• Consistent compliance: Accounts and confirmation statement filings are up to date with no overdue notices, indicating sound regulatory adherence.
• No employees: The absence of staff reduces operational complexity and fixed costs, which can aid cash flow management given the asset-focused business model.

4. Due Diligence Notes:

• Assess cash flow and income generation from the investment property to confirm ability to service short-term creditors and mortgage obligations.
• Review the nature and terms of director’s current accounts (£230,720 short-term creditor) for potential related party loans or deferred payments impacting liquidity.
• Confirm valuation methodology and frequency for investment property to ensure revaluation reserve is reliable and not overly optimistic.
• Investigate the reasons behind persistent negative retained earnings and evaluate historical profitability trends.
• Examine any contingent liabilities or provisions (£33,170 noted) for potential future cash outflows.