Company Number: 12949796

Analysis Date: 2025-07-29 18:00 UTC

1. Risk Rating: HIGH
   The company exhibits a high risk profile primarily due to persistent and increasing net liabilities, significant negative working capital, and a reliance on intercompany balances. These factors indicate solvency and liquidity concerns that could challenge the company's ability to meet its short-term obligations.

2. Key Concerns:

• Negative Net Assets: The company has reported net liabilities of £412,886 as of 31 March 2024, worsening from £335,262 in the prior year, indicating erosion of shareholder equity and potential solvency issues.
• Negative Net Current Assets: The working capital position is significantly negative £601,618 in 2024, exacerbated from negative £518,340 in 2023, which suggests liquidity problems and an inability to cover short-term liabilities from current assets.
• Large Amounts Owed to Group Undertakings and Other Creditors: Current liabilities include £1.9 million owed under "other creditors" and notable intercompany balances, which may suggest reliance on group funding and potential related-party risks, especially if these are repayable on demand.

3. Positive Indicators:

• Stable Fixed Asset Base: Tangible fixed assets and investments have remained relatively stable (£188,732 total fixed assets), providing some asset backing.
• No Overdue Filings: The company is compliant with filing deadlines for accounts and confirmation statements, indicating good regulatory compliance.
• Experienced Management Team: The presence of multiple directors, including an accountant, and no records of director disqualifications suggests competent governance at board level.

4. Due Diligence Notes:

• Assess the Nature and Terms of Intercompany Balances: Detailed review of the £1.37 million owed by group undertakings and £1.9 million other creditors to understand their nature (e.g., loans, trade payables), repayment terms, and related party risk.
• Examine Cash Flow Projections and Going Concern Assumptions: Although directors assert going concern, the negative working capital and net liabilities warrant scrutiny of cash flow forecasts and funding plans to confirm viability.
• Review Underlying Operational Performance: The accounts lack a profit and loss statement; obtaining and analyzing internal management accounts or additional financial information to assess revenue generation, profitability, and sustainability of operations is critical.
• Clarify the Composition of ‘Other Creditors’: The large figure in other creditors should be analyzed for any contingent liabilities or unusual terms that may impact financial stability.