Company Number: 12429776

Analysis Date: 2025-07-20 18:28 UTC

1. Risk Rating: MEDIUM
   The company demonstrates positive net current assets and a reasonable cash balance, indicating some ability to meet short-term obligations. However, a significant decline in net current assets and shareholders’ funds from 2023 to 2024 suggests some financial strain or operational challenges. The presence of sizable current liabilities and related party transactions requires cautious monitoring.

2. Key Concerns:

• Declining Net Current Assets and Equity: Net current assets fell from £478,823 in 2023 to £207,808 in 2024, and shareholders’ funds declined similarly, which may indicate reduced financial buffer or profitability issues.
• High Current Liabilities vs. Debtors: Current liabilities are substantial (£878,610 in 2024) and not fully matched by debtors (£409,834), which could pose liquidity risk if debtors are not collected promptly.
• Related Party Transactions: Management fees of £265,919 owed to the parent company could influence cash flows and raise concerns about dependency or transfer pricing arrangements.

3. Positive Indicators:

• Strong Cash Position: Cash reserves increased slightly to £676,584 in 2024, supporting short-term liquidity.
• No Overdue Filings: Accounts and confirmation statements are up to date, indicating good regulatory compliance and governance.
• Stable Leadership: Directors have been in place since incorporation, suggesting operational continuity.

4. Due Diligence Notes:

• Investigate reasons behind the significant drop in debtors and net current assets between 2023 and 2024, including aging and collectability of receivables.
• Review the nature and terms of related party transactions with the parent company, including management fees and any balances outstanding.
• Assess profitability and cash flow trends from detailed profit and loss account data, which are not publicly filed.
• Confirm the sustainability of the business model in the artistic creation sector given the financial fluctuations.