SCP DEVELOPMENTS LIMITED
Executive Summary
SCP Developments Limited is a newly formed micro-entity operating in building project development, currently showing a negative net working capital position and shareholders' funds. While compliant with statutory filings and having an evenly split ownership, the company's limited operating history and negative financial position indicate a high risk profile requiring further investigation into liquidity management and operational viability.
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This analysis is opinion only and should not be interpreted as financial advice.
SCP DEVELOPMENTS LIMITED - Analysis Report
Risk Rating: HIGH
The company shows negative net current assets and shareholders' funds within its first year of operation, indicating potential solvency issues. Given the micro-entity status and limited financial history, the risk is elevated due to insufficient capital to cover current liabilities.Key Concerns:
- Negative net current assets of £440 suggest the company may struggle to meet short-term obligations.
- The company was incorporated only in January 2023, so it lacks an operating track record or profit history to support sustainability assumptions.
- All directors reside at the same address, which may raise governance concerns related to independence and operational robustness.
- Positive Indicators:
- The company is compliant with filing obligations; accounts and confirmation statements are up to date with no overdue filings.
- The presence of three directors and three persons of significant control with evenly distributed shareholdings suggests a balanced ownership structure.
- The company is engaged in building project development, a sector with potential growth, although more operational data is needed.
- Due Diligence Notes:
- Investigate the nature of current liabilities and whether there are any creditor arrangements or payment delays impacting liquidity.
- Assess the company’s business plan, cash flow forecasts, and funding sources to understand how it intends to resolve the current negative working capital position.
- Review any intercompany transactions or related party loans that may influence the financial position and director involvement.
- Confirm if there are any contingent liabilities or off-balance-sheet commitments not disclosed in the accounts.
- Evaluate management experience and governance practices given the shared address and ownership concentration.
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