RM INVESTMENT AND DEVELOPMENT LIMITED

Executive Summary

RM Investment and Development Limited exhibits improved liquidity and solvency positions with a strong net current asset base and increased equity. However, the stark reduction in investment property value and reliance on significant interest-free intercompany loans introduce risk factors requiring further scrutiny. Absence of profit and loss data limits full operational assessment, warranting additional due diligence on financial performance and asset recoverability.

RM INVESTMENT AND DEVELOPMENT LIMITED - Analysis Report

Company Number: 13159809

Analysis Date: 2025-07-20 14:08 UTC

1. Risk Rating: MEDIUM
   The company’s balance sheet shows a strong improvement in net current assets from a negative £338k in 2023 to a positive £552k in 2024, indicating better short-term liquidity. However, the significant drop in fixed assets due to a reclassification or impairment of investment property from £633k to £9.9k is a concern. The company remains dependent on intercompany balances and loans that are interest-free and repayable on demand, which may affect cash flow stability.

2. Key Concerns:

• Investment Property Valuation: The investment property’s carrying value decreased dramatically from £633,067 to £9,934, suggesting a potential impairment or reclassification. This raises questions about asset quality and future earnings from property holdings.
• Intercompany Loans and Debtors: Large amounts owed by group undertakings (£549k) and connected companies, interest-free and repayable on demand, may carry collectability risk and impact liquidity if these sums are not recovered promptly.
• Lack of Profit and Loss Disclosure: The omission of the income statement limits the ability to assess profitability, cash generation, and operational performance, restricting a full evaluation of sustainability.

3. Positive Indicators:

• Improved Working Capital Position: Net current assets have turned positive and substantially increased, indicating the company’s enhanced ability to meet short-term liabilities.
• No Overdue Filings: The company is compliant with filing deadlines for accounts and confirmation statements, indicating reasonable governance and regulatory adherence.
• Shareholders’ Funds Growth: Equity has nearly doubled from £295k to £563k, reflecting retained earnings accumulation or capital injections, supporting solvency.

4. Due Diligence Notes:

• Verify the nature and reasoning behind the significant reduction in investment property value and whether this is a permanent impairment or accounting reclassification.
• Investigate the collectability and terms of intercompany and related party balances, including the risk of delayed repayment or write-offs.
• Obtain and review the company’s profit and loss accounts or management accounts to assess revenue, profitability, and cash flow trends.
• Examine any contingent liabilities or off-balance-sheet exposures that may affect financial stability.
• Confirm the director’s background and conduct records to ensure no governance or regulatory issues.