Company Number: 13827333

Analysis Date: 2025-07-29 20:09 UTC

1. Risk Rating: MEDIUM
   The company shows solid net asset backing and positive working capital in its latest year, indicating solvency. However, the recent material reduction in investment property value and a retained earnings deficit signal some operational and profitability concerns, warranting caution.

2. Key Concerns:

• Significant reduction in investment property value from £1.48M to £698K in one year, which could reflect impairment or asset disposals impacting business stability.
• Retained earnings moved from a small positive balance to a deficit of £40.7K, indicating recent losses that may affect long-term sustainability.
• Presence of a £39.7K unsecured government-backed loan (Bounce Back Loan) repayable over more than five years, adding to liabilities and cash flow commitments.

3. Positive Indicators:

• Strong net current assets of £544K at 31 January 2024, showing good short-term liquidity to meet current obligations.
• Shareholders’ funds remain robust at over £1.2M, providing a solid equity base.
• No overdue filings or compliance issues; accounts and confirmation statement are up to date, reflecting good governance.
• Single director and 100% ownership suggest streamlined decision-making.

4. Due Diligence Notes:

• Clarify the nature of the investment property changes: whether the reduction is due to disposals, revaluation, or potential impairment, and implications for future earnings.
• Investigate the causes of the deficit in retained earnings, including underlying operational performance and future profitability prospects.
• Review loan terms and repayment schedule for the Bounce Back Loan to assess impact on cash flow and solvency.
• Confirm the company’s revenue streams and rent receivables, given the high debtor balance (£535K), to evaluate cash collection risk.
• Assess director’s plans for business growth or stabilization given the losses and asset revaluation.