Company Number: 12422894

Analysis Date: 2025-07-20 18:34 UTC

1. Risk Rating: HIGH
   The company exhibits a high solvency risk due to persistent negative net assets and shareholders' funds over multiple years, coupled with very high long-term liabilities relative to assets. Liquidity is also a concern given minimal cash balances and current assets compared to substantial current liabilities.

2. Key Concerns:

• Negative Equity Position: Shareholders' funds remain negative (-£514 in 2024), indicating the company’s liabilities exceed its assets, a critical solvency red flag.
• High Long-Term Debt: Creditors falling due after one year amount to £438,630, almost matching the total fixed assets, which are fully impaired on the balance sheet, suggesting potential over-leverage.
• Minimal Liquidity: Cash holdings are low (£4,998 in 2024) against current liabilities of £438,630, implying significant liquidity strain and potential difficulties meeting short-term obligations.

3. Positive Indicators:

• Consistent Filing Compliance: No overdue filings for accounts or confirmation statements, reflecting adherence to regulatory requirements.
• Stable Ownership and Management: Two directors with significant control (25-50% share and voting rights each), indicating a stable governance structure without director turnover or disqualifications.
• Investment Property Held: The company holds investment property valued at £433,118, which may provide future income or capital appreciation, although currently fully depreciated on balance sheet.

4. Due Diligence Notes:

• Verify Valuation and Income from Investment Property: The fixed asset carrying value has been fully depreciated to nil, yet investment property is recorded at cost. Confirm fair value assessments and rental income streams to assess asset quality and cash flow potential.
• Analyze Debt Terms and Covenants: Investigate the nature, repayment schedule, and security of the £438,630 creditors due after one year to understand refinancing risks and creditor exposure.
• Assess Business Model Viability: Review the company’s operating performance, profitability, and strategy to determine if it can generate sufficient cash flows to cover liabilities and improve equity position.
• Check for Contingent Liabilities or Related Party Transactions: Given the high debt and negative equity, explore any off-balance sheet risks or related party dealings that may impact financial stability.

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