QE ACORN HOLDCO 2 LTD

Executive Summary

QE Acorn Holdco 2 Ltd is an active small private holding company with a short operating history and negative equity driven by significant intercompany borrowings. While filings are current and the audit report is unqualified, the reliance on a large parent loan and absence of operational cash flows elevate its risk profile. Further due diligence on group support and subsidiary performance is advisable to fully assess financial stability and long-term viability.

QE ACORN HOLDCO 2 LTD - Analysis Report

Company Number: 14261937

Analysis Date: 2025-07-29 21:01 UTC

1. Risk Rating: MEDIUM
   The company exhibits a moderately elevated risk profile primarily due to negative net equity and significant intercompany borrowings, coupled with a limited operating history. However, the absence of overdue filings and an unqualified audit report mitigate immediate concerns.

2. Key Concerns:

• Negative Shareholders’ Funds: The company’s equity declined from £100 in 2022 to a negative balance of £5,182 in 2023, reflecting net liabilities and potential solvency pressure.
• High Intercompany Borrowings: The £11.04 million loan from the parent company, repayable on demand and accruing 12.5% interest, poses liquidity and refinancing risk if the parent’s support weakens.
• Limited Operational Activity: As a holding company incorporated in mid-2022 with minimal assets and no reported income statement, the business model’s sustainability and cash flow generation remain uncertain.

3. Positive Indicators:

• Compliant with Filings: Annual accounts and confirmation statements are up to date with no overdue filings, indicating regulatory compliance and governance diligence.
• Unqualified Audit Report: The financial statements were audited with an unqualified opinion, providing reasonable assurance on the accuracy of reported figures.
• Going Concern Affirmation: Directors explicitly state the company is a going concern, implying confidence in ongoing financial support and operational continuity.

4. Due Diligence Notes:

• Review the nature and terms of the £11 million intercompany loan, including repayment prospects and parent company financial strength.
• Investigate the subsidiary (QE Acorn Finco Limited) performance and its financials, as this likely impacts the holding company’s value and risk.
• Examine the business plan and strategic outlook to assess the company’s future cash flow generation and operational sustainability beyond financial support.
• Confirm director experience and any potential conflicts given several recent changes in board composition.