Risk Assessment: SEAHAVEN FM BROADCASTING (06682453)

1. Risk Rating: HIGH

The company is technically insolvent with net liabilities of £4,473 and a severe working capital deficit of £10,860. While 2025 shows encouraging revenue growth and a narrowing of losses, the balance sheet remains fundamentally impaired following four years of sustained deterioration from a net asset position of £30,154 (2020) to negative territory.

2. Key Concerns

Insolvency Risk The company has negative net assets (£4,473) for the second consecutive year. Total liabilities (£24,563 including long-term creditors) substantially exceed total assets (£19,857). As a company limited by guarantee with no share capital, the ability to raise equity funding is inherently constrained—members' liability is limited to the guarantee amount, which appears to be nominal at £5.

Critical Liquidity Shortfall Current liabilities (£20,510) are more than double current assets (£9,650 including prepayments), yielding a current ratio of approximately 0.47. This means the company cannot meet its short-term obligations from liquid resources, creating ongoing solvency pressure and dependence on creditor forbearance or continued revenue generation.

Sustained Erosion of Financial Position The trajectory from net assets of £30,154 (2020) to negative territory represents a cumulative deterioration of approximately £34,600 over five years. While 2025 shows improvement (£2,712 reduction in net liabilities), this follows a period of severe depletion that raises questions about long-term viability.

3. Positive Indicators

Revenue Recovery in 2025 Turnover increased by 61% from £52,965 to £85,520, driven primarily by a significant uplift in UK sales revenue (from £44,448 to £77,555). This suggests the business model retains commercial viability and may reflect successful programming or advertising initiatives.

Narrowing Losses The profit and loss reserve improved from -£7,190 to -£4,478, implying a profit of approximately £2,712 in 2025. This marks a potential inflection point after years of deterioration.

Regulatory Compliance Accounts and confirmation statements are filed on time with no overdue filings. The company maintains an active status and is not in liquidation or administration.

Cost Management Average employee numbers reduced from 4 to 3, and the partial P&L data suggests employment costs have been constrained, indicating active cost management.

4. Due Diligence Notes

Going Concern Basis The accounts contain no visible going concern note or director commentary on solvency (limited by micro-entity filing). It is critical to establish whether directors have assessed going concern and whether creditors have confirmed continued support. Without this, the company's ability to trade beyond 12 months is uncertain.

Director with "ADMINISTRATOR" Title Nigel Chorley is listed with the title "ADMINISTRATOR." This requires urgent clarification—whether this denotes an administrative role within the organisation or relates to a formal insolvency appointment. The company is not flagged as being in administration, but this designation is atypical and warrants investigation.

Persons with Significant Control Register The PSC register shows only a generic statement rather than identified individuals. For a company limited by guarantee, this may indicate that no single person holds 25%+ control, but the lack of transparency is notable and potentially non-compliant with the 28-day notification requirement.

Nature of Long-Term Creditors Long-term liabilities of £3,980 (reduced from £5,426) require investigation. Understanding whether these relate to equipment finance, loans from members, or other obligations is essential for assessing the true debt burden and refinancing risk.

Revenue Sustainability The dramatic increase in UK sales revenue (74% year-on-year) requires scrutiny. Is this from a one-off contract, sustainable advertising growth, or a change in revenue recognition? Given the historical volatility (revenue fell significantly from 2020/2021 levels), confirmation of forward revenue visibility is important.

Relationship Between Fixed Assets and Revenue Fixed assets of £10,440 (likely broadcasting equipment) against the revenue base appears proportionate, but the depreciation charge of £3,024 suggests assets are being consumed. Capital replacement requirements should be assessed against available cash flow.