PEPPER PROPERTIES SOUTH WEST LTD

Executive Summary

Pepper Properties South West Ltd demonstrates a high financial risk due to persistent negative net assets and significant liquidity shortfalls. The company's continued operation depends heavily on director support, with working capital deficits highlighting potential cash flow challenges. While compliance with filing requirements and stable fixed assets provide some assurance, thorough review of asset recoverability and director backing is essential before considering investment.

PEPPER PROPERTIES SOUTH WEST LTD - Analysis Report

Company Number: 13044415

Analysis Date: 2025-07-20 13:22 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency risk, demonstrated by persistent net liabilities and substantial current liabilities exceeding current assets. The heavy reliance on director financial support to maintain operations further elevates the risk profile.

2. Key Concerns:

• Negative Net Assets: The company's net liabilities increased from -£4,136 in 2022 to -£7,277 in 2023, indicating worsening equity position.
• Working Capital Deficit: Current liabilities (~£312k) vastly exceed current assets (~£2.9k), resulting in net current liabilities of approximately -£117k, signaling liquidity constraints.
• Going Concern Reliance on Directors: The financial statements disclose dependency on directors' continued financial support to meet liabilities, highlighting vulnerability if such support ceases.

3. Positive Indicators:

• Stable Fixed Assets: The company’s fixed assets remain stable at around £423k, suggesting some tangible asset base backing operations.
• Timely Filing Compliance: Both accounts and confirmation statements are filed on time, indicating good regulatory compliance and governance practices.
• No Employee Costs: The company employs no staff, which may reduce operational overhead and cash burn.

4. Due Diligence Notes:

• Nature and Valuation of Fixed Assets: Investigate the quality, liquidity, and market value of the fixed assets to assess their recoverability, especially given the net liabilities position.
• Director Financial Support Details: Clarify the extent, terms, and sustainability of financial support from directors, including any formal agreements or guarantees.
• Debt Structure and Creditors: Examine the composition and terms of current and long-term liabilities (£312k each), including repayment schedules and creditor identities.
• Business Model and Revenue Streams: Obtain detailed operational data since current assets and cash balances are minimal, and no employees are recorded, raising questions about revenue generation and sustainability.
• Potential Related Party Transactions: Given both directors also hold significant control and personal addresses, assess any related party transactions that might affect financial position.