Company Number: 13411785

Analysis Date: 2025-07-29 16:57 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity risks as evidenced by large negative net current assets and net liabilities, combined with minimal cash reserves and substantial short-term debt.

2. Key Concerns:

• Severe Liquidity Shortfall: Cash holdings are negligible (£40), while current liabilities exceed £814,000, resulting in a net current liability position of approximately £814,300 as of May 2024. This raises immediate concerns about the company's ability to meet short-term obligations.
• Negative Net and Shareholders’ Equity: Net liabilities have worsened from £1,713 in 2023 to £72,217 in 2024, and shareholders’ funds are negative (£105,965), indicating accumulated losses and erosion of capital.
• Heavy Reliance on Secured Debt: The company has a substantial loan of £459,035 secured against investment property, representing a high leverage position relative to equity and assets, increasing financial risk.

3. Positive Indicators:

• Investment Property Asset: The company holds an investment property valued at £750,000, which is a tangible asset that may provide collateral value and future revenue.
• No Overdue Filings: All statutory filings and accounts are up to date with no overdue returns or penalties, indicating acceptable compliance and governance discipline.
• Ongoing Financial Support: Directors assert ongoing financial support from themselves and the parent company, which may mitigate immediate going concern risks.

4. Due Diligence Notes:

• Clarify the nature and terms of the secured loan, including repayment schedule, interest terms, and any covenant conditions attached to the mortgage on the investment property.
• Investigate the company's cash flow projections and plans to improve liquidity given the critical working capital deficit.
• Review the relationship with the parent company and directors’ financial support mechanisms to assess their sustainability and formal arrangements.
• Confirm the valuation methodology and stability of the investment property’s fair value to ensure asset backing is reliable.
• Examine the absence of an income statement and any implications for profitability or ongoing operational performance.