Company Number: 12918943

Analysis Date: 2025-07-29 13:55 UTC

1. Risk Rating: HIGH

The company shows significant financial distress indicators. It has persistent net liabilities and negative shareholders’ funds, indicating insolvency risk. Liquidity is constrained with net current liabilities exceeding £58,000 as of the latest accounts. The going concern statement relies heavily on director support, which raises concerns over sustainability without external financing.

2. Key Concerns:

• Solvency Risk: Net liabilities of £32,250 as of October 2023 and negative shareholders’ funds (£-33,479) imply the company’s liabilities exceed its assets.
• Liquidity Concerns: Current liabilities (£63,336) greatly exceed current assets (£5,285), resulting in a working capital deficit of approximately £58,000, signaling potential cash flow challenges.
• Reliance on Director Loans: A large portion of current liabilities (£59,565) is owed to directors interest-free and repayable on demand, which may not be sustainable long-term and raises questions about external creditor exposure.

3. Positive Indicators:

• Stable Investment Property Value: Investment property valued at £90,000 has remained steady year-on-year and is the primary asset.
• No Overdue Filings: The company is compliant with both accounts and confirmation statement filing deadlines, indicating adequate regulatory compliance.
• Low Operating Overheads: The company has only 2 employees, limiting payroll obligations and operational expenses.

4. Due Diligence Notes:

• Investigate the director loan arrangements in detail: terms, likelihood of repayment, and whether the loans can be called in under financial stress.
• Obtain independent professional valuation of the investment property to confirm its fair value and marketability.
• Review cash flow forecasts and any plans for capital injection or refinancing given the persistent negative working capital and net liabilities.
• Assess the ongoing viability of the business model given the reliance on rental income and fixed charges by Fleet Mortgages Limited.
• Confirm that the director continuing financial support is sustainable and documented.