Company Number: 14071238

Analysis Date: 2025-07-29 13:32 UTC

1. Risk Rating: HIGH
   The company shows significant financial distress with persistent net current liabilities (~£960k in 2024) and negative net assets (-£190k in 2024), indicating solvency risks. The large current liabilities relative to current assets and ongoing losses raise serious concerns about its ability to meet obligations as they fall due.

2. Key Concerns:

• Negative Net Assets and Shareholders' Funds: The company’s equity position has deteriorated from -£74k in 2023 to -£190k in 2024, indicating accumulated losses and erosion of capital.
• Working Capital Deficit: Net current liabilities are substantial and increasing (£844k in 2023 to £960k in 2024), reflecting liquidity constraints and potential cash flow difficulties.
• High Short-Term Debt: The company has large amounts of bank loans and overdrafts (£333k in 2024) plus other creditors totaling over £790k, all due within a year, which may pressure cash resources.

3. Positive Indicators:

• Asset Base: The company holds tangible fixed assets (land and buildings) valued at £770k, which could serve as collateral or be leveraged to improve financial standing if realizable.
• Compliance: No overdue filings; accounts and confirmation statements are up to date, demonstrating regulatory compliance and governance discipline.
• Stable Management: Directors and persons with significant control are identified and actively involved since incorporation, indicating stable leadership.

4. Due Diligence Notes:

• Cash Flow Analysis: Investigate underlying cash flow trends and forecasts to assess if current liabilities can be serviced or refinanced.
• Creditors’ Terms: Review the nature and terms of bank loans and other creditors, including repayment schedules and covenants.
• Asset Valuation: Confirm the market value and liquidity of fixed assets reported at £770k to ascertain realizable value under distress scenarios.
• Profitability and Revenue: Obtain more detailed income statement data to understand revenue generation, margins, and causes of losses.
• Directors’ Plans: Clarify any restructuring or turnaround plans by management to address financial deficits.
• Related Party Transactions: Verify if any related party debts exist given the directors’ significant control.