Risk Analysis: RENAISSANCE (ECOSSE) LIMITED

1. Risk Rating: MEDIUM

Justification: The company is solvent with substantial net assets of £2.84M and owns significant tangible property assets. However, persistent net current liabilities, a declining cash position, and steadily eroding net assets over multiple years present material concerns that require monitoring. The business model—property-heavy hospitality—is inherently working-capital negative, which mitigates some concern, but the trajectory warrants attention.

2. Key Concerns

Concern 1: Persistent Net Current Liabilities and Liquidity Risk

Current liabilities (£982,268) significantly exceed current assets (£480,461), resulting in net current liabilities of £(501,807). While this has improved marginally from £(535,850) in 2023, the company has been in a net current liability position for multiple consecutive years. This means the company depends on cash flow from operations, refinancing, or asset realisation to meet short-term obligations as they fall due.

Concern 2: Declining Cash and Eroding Net Assets

Cash has fallen dramatically from £995,004 (2022) to £384,764 (2024)—a 61% decline over two years. Simultaneously, net assets have declined each year: £2,981,084 (2022) → £2,907,870 (2023) → £2,838,017 (2024). This consistent erosion indicates the company is reporting ongoing losses, depleting retained earnings. Without visibility into the P&L (filleted accounts exempt from filing), the magnitude and trajectory of trading losses cannot be fully assessed.

Concern 3: Significant Increase in Provisions

Provisions surged from £12,759 (2023) to £92,305 (2024)—an increase of approximately £79,546 or over 600%. Without detailed notes explaining the nature of these provisions (the accounts text was truncated), this creates uncertainty. Provisions could relate to deferred tax, dilapidation liabilities, litigation, or other obligations that may require future cash outflows.

3. Positive Indicators

• Substantial Tangible Asset Base: £3.49M in tangible assets (predominantly land and buildings at the registered office address—Orocco Pier, a known hotel/venue in South Queensferry) provides significant asset backing and borrowing capacity.

• Long-Established Business: Incorporated in 2001, the company has over 23 years of operating history, suggesting resilience through multiple economic cycles including the pandemic period.

• Improving Liability Position: Total liabilities decreased from £1,110,281 (2023) to £982,268 (2024), and creditors due within one year fell from £1,110,281 to £982,268. Long-term creditors also reduced from £88,743 to £57,423.

• Compliance and Governance: Accounts are filed and up to date (not overdue), the company is active, and three directors are in place. No director disqualification records are evident.

• Going Concern Assertion: The accounts have been prepared on a going concern basis, and the directors approved the financial statements in September 2025, indicating their confidence in the company's ability to continue trading.

4. Due Diligence Notes