RISLEY 1 LIMITED
Company number 09414989 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Financial Health Assessment: RISLEY 1 LIMITED
1. Financial Health Score: D+
Explanation: The company presents a concerning picture of technical insolvency, with liabilities exceeding assets by £1.74 million. While the underlying hotel asset provides some comfort and current trading appears functional, the balance sheet shows significant structural weakness. The score reflects a business that is surviving rather than thriving – kept alive through creditor forbearance rather than inherent financial strength.
2. Key Vital Signs
| Vital Sign | 2025 | 2024 | Trend | Interpretation |
|---|---|---|---|---|
| Net Assets | -£1,744,060 | -£1,254,540 | ↓ Deteriorating | ⚠️ Critical – technically insolvent |
| Current Ratio | 2.35 | 13.61 | ↓ Weakening | Still healthy but declining rapidly |
| Working Capital | £303,434 | £635,324 | ↓ Declining | ⚠️ Halved in one year |
| Long-term Debt | £3,900,477 | £3,773,146 | ↑ Growing | ⚠️ Significant leverage |
| Fixed Assets | £1,852,983 | £1,883,282 | ↓ Depreciating | Expected for property |
| Employee Count | 3 | 8 | ↓ Reduced | ⚠️ Significant workforce reduction |
3. Diagnosis
Symptoms of Financial Distress
Technical Insolvency – The "Low Blood Pressure" Condition The most alarming symptom is the negative net assets of -£1,744,060. In simple terms, if the company were to settle all its debts today using its balance sheet values, there would be a shortfall of nearly £1.75 million. This has worsened by approximately £490,000 over the year, indicating the condition is deteriorating rather than healing.
The Debt Burden – "Arterial Blockage" Long-term creditors of £3.9 million represent approximately 164% of total assets. This is the financial equivalent of a patient whose cholesterol is severely clogging the arteries – the debt servicing requirements restrict healthy cash flow and limit the company's ability to invest in recovery or growth.
Working Capital Hemorrhage Net current assets have nearly halved from £635,324 to £303,434 in just one year. This dramatic decline suggests the business is consuming its short-term financial reserves at an unsustainable rate. Current liabilities have increased over fourfold (from £50,365 to £224,523), which may indicate creditors demanding shorter payment terms or deferred obligations coming due.
Workforce Atrophy The reduction from 8 to 3 employees is striking. For a hotel business, this suggests either: - Significant operational downsizing - Reduced service capacity - Potential reliance on casual or agency staff not reflected in the headcount - Seasonal adjustments (though the year-end figure is what's reported)
Underlying Health Indicators
Property Asset – The "Strong Heart" The fixed assets of £1,852,983 (likely the hotel property) provide the core asset backing. However, under micro-entity accounting, this is carried at historical cost less depreciation, not market value. The property may well be worth significantly more than its book value – this is a crucial unknown that could change the diagnosis entirely.
Creditor Forbearance – "Life Support" The company's continued operation despite technical insolvency strongly suggests the long-term creditors (likely the Kathuria family or related entities) are not demanding repayment. This informal support is the financial equivalent of life support – essential for survival, but not a sign of underlying health.
Filing Compliance – "Following Doctor's Orders" The company is filing accounts on time and appears compliant with regulatory requirements, suggesting the directors are managing the situation responsibly rather than ignoring symptoms.
Historical Context
The company was previously known as TALASH HOTELS NO 3 LIMITED until August 2019. This rebrand coincided with a period when net assets were recovering from negative territory (-£42,460 in 2020), suggesting the rename may have been part of a financial restructuring or fresh start.
The trajectory from 2020-2023 showed recovery, with net assets improving to £743,139 by 2023. However, the reversal to significant negative net assets in 2024 and 2025 suggests a major event – likely additional borrowing secured against the property or reclassification of related-party debt.
4. Recommendations
Immediate Actions (Within 3 Months)
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Obtain Professional Valuation – Commission an independent market valuation of the hotel property. If the property is worth significantly more than book value (highly likely given property inflation since acquisition), this could demonstrate that the company is not genuinely insolvent on a going-concern basis.
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Review Debt Structure – The £3.9 million long-term debt needs careful examination. Determine: