Company Number: 13153503

Analysis Date: 2025-07-20 13:49 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity risks, evidenced by substantial net current liabilities and negative shareholders’ funds. The net liabilities nearly doubled from 2023 to 2024, indicating deteriorating financial health.

2. Key Concerns:

• Severe Negative Net Current Assets: Net current liabilities of £3.52 million as of March 2024, worsening from £1.5 million the prior year, suggest immediate liquidity stress. Current liabilities more than quadruple current assets, signaling difficulties in meeting short-term obligations.
• Negative Net and Shareholders’ Funds: Net liabilities stand at £1.9 million, indicating the company’s total liabilities exceed its total assets, which questions ongoing viability without external support.
• High Amounts Owed to Group Undertakings: £3.83 million owed to related parties (group undertakings) forms the bulk of current liabilities, which may suggest reliance on intra-group financing rather than independent cash generation.

3. Positive Indicators:

• Growth in Fixed Assets: Fixed tangible assets nearly tripled to £1.65 million, suggesting investment in operational infrastructure which could support future revenue growth.
• Consistent Compliance: No overdue filings for accounts or confirmation statements, reflecting regulatory compliance and orderly governance.
• Stable Ownership and Management: Single controlling party with full voting rights and a consistent director, reducing governance complexity.

4. Due Diligence Notes:

• Investigate the nature, terms, and repayment schedule of amounts owed to group undertakings to understand funding sustainability and creditor relationships.
• Review cash flow statements and management forecasts to assess the company’s ability to improve liquidity and reverse the negative working capital trend.
• Scrutinize the operational performance and revenue trends in the unlicensed restaurant sector (SIC 56102) where the company operates, to assess business sustainability and market risks.
• Confirm if any contingent liabilities or off-balance sheet financing exist given the significant creditor balances and finance leases.
• Verify the director’s plans regarding the negative net asset position and any restructuring or recapitalisation intentions.