ORCHARD HEN FARM EGGS LIMITED

Executive Summary

Orchard Hen Farm Eggs Limited, newly incorporated in 2023, shows early-stage financial distress with negative net current assets and substantial director loans, presenting a high risk of solvency and liquidity challenges. While the company complies with statutory filings and holds tangible assets relevant to its business, the absence of profitability data and reliance on director funding warrant thorough due diligence before investment consideration.

ORCHARD HEN FARM EGGS LIMITED - Analysis Report

Company Number: 14718447

Analysis Date: 2025-07-29 18:01 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity risks, primarily evidenced by substantial net current liabilities (£116,985) and negative shareholders' funds (£80,131) within its first financial period. The high level of director loans further compounds concerns regarding financial stability.

2. Key Concerns:

• Negative Net Current Assets and Shareholders' Funds: The company’s current liabilities (£172,529) far exceed its current assets (£55,544), indicating potential difficulty in meeting short-term obligations. Negative equity suggests accumulated losses or undercapitalization.
• High Director Loan Balance: Owing £138,147 to directors indicates reliance on related-party funding, which may reflect difficulty in obtaining external financing and could present risks if directors withdraw support.
• Absence of Revenue and Profit Data: The filed accounts omit an income statement (per small company exemption), limiting insight into operational performance and cash flow generation. The company also reports no employees, raising sustainability questions.

3. Positive Indicators:

• Recent Incorporation with Tangible Fixed Assets: The company has invested £36,954 in tangible fixed assets, indicating capital expenditure to support operations.
• No Overdue Filings: The company is up to date with both accounts and confirmation statement filings, demonstrating compliance with statutory requirements.
• Directors’ Professional Backgrounds Aligned to Business: The directors’ occupations (farrier and chicken farmer) suggest relevant operational knowledge in farming, potentially supporting business sustainability.

4. Due Diligence Notes:

• Investigate the nature and terms of director loans and whether these are expected to be repaid or converted to equity.
• Assess the company’s business plan, revenue generation, and cash flow projections to evaluate going concern assumptions.
• Confirm the absence of contingent liabilities or impending financial obligations not reflected in the accounts.
• Review any related party transactions and their impact on financial stability.
• Seek clarification on the company’s strategy for addressing the negative net asset position and liquidity constraints.