Company Number: 12401620

Analysis Date: 2025-07-20 18:36 UTC

1. Risk Rating: MEDIUM

This rating reflects the company's modest net assets position and current liabilities exceeding current assets, which could signal liquidity constraints despite positive net current assets reported in the latest year. The company is relatively young and small (micro entity), operating in real estate trading where asset values and market conditions can materially impact financial stability.

2. Key Concerns:

• High Long-Term Creditors: The company has significant amounts falling due after more than one year (~£82k), substantially higher than current assets, which suggests reliance on long-term debt financing and potential solvency risk if cash flows deteriorate.
• Low Share Capital and Equity Base: Share capital is minimal (£2), and shareholders' funds, while improving, are modest (£8.8k in 2024). This limited equity buffer may constrain the company’s ability to absorb losses or secure additional financing.
• Limited Financial Transparency: Accounts are unaudited and prepared under micro-entity exemptions, with no profit and loss account filed. This restricts assessment of operational profitability and cash flow generation, increasing uncertainty around sustainability.

3. Positive Indicators:

• Growing Net Assets: The company’s net assets have increased steadily from negative in 2020 to £8,800 in 2024, indicating incremental improvement in financial position.
• Positive Net Current Assets: The company reported positive net current assets (£14.2k) in the latest year, suggesting some short-term liquidity cushion.
• Compliance with Filing: All accounts and confirmation statements have been filed on time and are up to date, demonstrating regulatory compliance and good governance in statutory reporting.

4. Due Diligence Notes:

• Cash Flow and Profitability: Obtain or request management accounts or detailed profit and loss statements to evaluate cash flow adequacy and operational profitability, which are not disclosed in micro-entity filings.
• Debt Structure and Terms: Clarify the nature and repayment terms of the significant long-term liabilities (£82k) to assess refinancing risk or upcoming maturity pressures.
• Asset Valuation: Verify the valuation methodology and marketability of fixed assets (£77k) as they represent the majority of total assets and critically impact solvency.
• Directors’ Background and Related Party Transactions: Review directors’ conduct records and any related party transactions given the company is closely held by two directors sharing an address.