Company Number: 13439965

Analysis Date: 2025-07-20 18:35 UTC

1. Risk Rating: HIGH
   The company shows significant solvency and liquidity concerns primarily due to very large current liabilities far exceeding current assets, resulting in substantial negative net current assets. This imbalance poses a high risk of inability to meet short-term obligations.

2. Key Concerns:

• Liquidity Deficit: Current liabilities at £1.8M vastly exceed current assets of £0.3M, creating a net working capital deficit of approximately £1.5M as of July 2024, deteriorating from prior years.
• Solvency Pressure: Although the company holds investment property valued at £1.5M, the fair value is director-assessed (not externally verified), and total net assets remain very low at £10,715, indicating limited equity buffer against liabilities.
• Operating Scale and Funding: The company is small with only 3 employees and minimal turnover details; heavy creditor balances (£1.77M) suggest reliance on external financing or trade credit, which may be unsustainable without increased cash flows or asset realisation.

3. Positive Indicators:

• Asset Growth: Investment property value increased significantly from £535k to £1.5M in the year, potentially enhancing future income or capital appreciation.
• Compliance: Filings are up to date with no overdue accounts or confirmation statements, indicating regulatory adherence.
• Established Control: Three individuals each hold 25-50% shareholdings, suggesting stable ownership and potentially aligned governance.

4. Due Diligence Notes:

• Verify the basis and independence of the investment property valuation to assess realisable value and liquidity potential.
• Investigate the nature of the large current liabilities and creditor balances to understand payment terms, related party transactions, or contingent liabilities.
• Review cash flow forecasts and business plans for sustainability and ability to bridge the working capital gap.
• Ascertain whether there are any contingent assets or liabilities not disclosed that may impact solvency.
• Confirm the absence of director disqualifications or legal proceedings, especially given the high creditor exposure.