Risk Analysis: PSB Holdings Limited (00943465)

1. Risk Rating: HIGH

Justification: The company presents a severe liquidity crisis with only £196 in cash against £1.2M in current liabilities, creating net current liabilities exceeding £1.2M. While net assets remain positive at £782K, this position is heavily dependent on a director-valued property revaluation. The absence of any meaningful liquid assets to service near-term obligations represents a material solvency concern.

2. Key Concerns

Concern 1: Critical Liquidity Position

Cash has deteriorated to £196 against current liabilities of £1,217,980. The current ratio is effectively zero. With no debtors, no stock, and negligible cash, the company has no capacity to meet creditor demands from liquid assets. The nature of the £1.2M in "other creditors" is undisclosed—it is unclear whether these are demand obligations, related-party loans, or trade payables, each carrying different risk profiles.

Concern 2: Dependency on Property Revaluation

Net assets of £782,216 rely entirely on a director-performed property revaluation. The freehold land and buildings are carried at £2,000,000 against a historical cost of only £1,255,794—a £744,206 revaluation uplift. If the property were carried at historical cost, net assets would collapse to approximately £38,000. The accounts state the directors consider the valuation "a realistic current market value," but no independent valuation evidence is provided.

Concern 3: Historical Volatility in Net Assets

The financial history reveals significant instability: - Net assets fell from £1,925,235 (2018) to £204,922 (2020)—a decline of approximately £1.7M - Recovery to £850,336 (2022) was followed by steady erosion back to £782,216 (2025) - The 2019-2020 collapse requires explanation—it may indicate a prior property revaluation downward or significant losses not visible in the filleted accounts

3. Positive Indicators

• Long-established entity: Incorporated in 1968, the company has operated for over 55 years, suggesting institutional resilience.
• Positive net asset position: Shareholders' funds of £782,216 provide a buffer, and the company is not technically insolvent on a balance sheet basis.
• Regulatory compliance: Accounts and confirmation statements are filed and current, with no overdue filings. The company maintains active status.
• Going concern assertion: Directors have formally assessed going concern and concluded no material uncertainties exist, accepting statutory responsibility for this determination.
• Property income stream: The accounting policy confirms rental income is generated, which presumably services the creditor obligations over time.
• Stable creditor levels: Total liabilities have increased only modestly year-on-year (£1,205K to £1,218K), suggesting creditors are not escalating rapidly.

4. Due Diligence Notes