ROUGH AND READY WHOLEFOODS LTD

Executive Summary

Rough and Ready Wholefoods Ltd currently faces a high financial risk profile due to significant and increasing negative net assets and a heavy debt burden. While the company maintains compliance with filing obligations and has clear governance structures, its liquidity and solvency position raise concerns about its ability to meet obligations without further financial support. Detailed due diligence on liabilities, cash flows, and business viability is strongly recommended prior to investment.

ROUGH AND READY WHOLEFOODS LTD - Analysis Report

Company Number: 13266131

Analysis Date: 2025-07-29 15:16 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency concerns with net liabilities worsening over recent years. Its equity remains deeply negative, indicating that total liabilities exceed total assets by a substantial margin. This financial position suggests a high risk of inability to meet long-term obligations without external support.

2. Key Concerns:

• Persistent Negative Net Assets: The net liabilities have grown from approximately £38,800 in 2021 to nearly £58,800 in 2024, demonstrating an ongoing erosion of shareholder funds and accumulated losses.
• Large Long-Term Creditors: The company has long-term liabilities exceeding £66,000, which are considerably higher than its total assets, indicating a heavy debt burden relative to its size and resources.
• Minimal Cash Reserves and Low Liquidity: Cash on hand is very low (£546 in 2024), and current liabilities are significantly higher than current assets, which could impede the company's ability to meet short-term obligations and operational expenses promptly.

3. Positive Indicators:

• Timely Filing and Compliance: The company has filed both accounts and confirmation statements on time, with no overdue filings noted, indicating good governance and compliance with statutory requirements.
• Active Status and Industry Classification: The company is active and operates in retail sectors (mail order and specialised food retail), which can be resilient segments if managed well.
• Stable Directorship and PSC Transparency: There is a consistent director since incorporation, and a clearly identified person with significant control holding between 50-75% shares and voting rights, which provides clarity in governance.

4. Due Diligence Notes:

• Investigate Nature and Terms of Long-Term Creditors: Understanding the composition, covenants, and repayment schedule of the £66,314 long-term liabilities is critical to assess refinancing risk or potential default.
• Review Cash Flow Forecasts and Financing Arrangements: Given low cash balances, it is important to check underlying cash flow projections, working capital management, and any external financing or shareholder support arrangements.
• Assess Business Model Viability and Profitability Trends: The accounts omit an income statement; obtaining management accounts or P&L data is essential to understand operating performance and future sustainability.
• Confirm Director and PSC Backgrounds: Although no disqualifications are indicated, verifying the professional background of the director and PSC could provide insight into operational stability and governance quality.
• Clarify Reason for Negative Equity and Losses: Additional details on the causes of continuing losses and how the company plans to return to profitability should be sought.