SGRIOB-RUADH DISTILLERS LTD

Executive Summary

Sgriob-Ruadh Distillers Ltd is currently facing significant financial distress, characterized by large negative equity, substantial current liabilities exceeding current assets, and continued operating losses. While the company is compliant with statutory filings and shows initial revenue generation, urgent attention is required to address liquidity and solvency risks to ensure ongoing operational viability.

SGRIOB-RUADH DISTILLERS LTD - Analysis Report

Company Number: SC676164

Analysis Date: 2025-07-20 18:57 UTC

1. Risk Rating: HIGH
   The company exhibits a high risk profile primarily due to its significant negative net assets, large current liabilities exceeding current assets, and operating losses. These factors suggest severe solvency and liquidity concerns.

2. Key Concerns:

• Solvency Risk: The company’s net liabilities stand at £114,012 as of October 2023, indicating that total liabilities exceed total assets. Shareholders’ funds are negative, which raises concerns about the company’s ability to meet its long-term obligations.
• Liquidity Concerns: Current liabilities (£331,251) far exceed current assets (£217,239), resulting in a negative working capital position. Cash on hand is minimal (£2), and trade creditors constitute most of the current liabilities, indicating potential cash flow pressures.
• Operational Stability: The company reported an operating loss of £113,414 for the year ended October 2023 on a turnover of only £29,528, suggesting that the business is not yet profitable and relies heavily on external financing or capital to sustain operations.

3. Positive Indicators:

• The company has filed all statutory accounts and confirmation statements on time, indicating compliance with regulatory filing obligations and governance requirements.
• Turnover has started to emerge in the latest year (2023) from zero previously, implying some initial commercial traction in its distilling business.
• The average number of employees increased to 4 in 2023 from 2 in 2022, which may indicate growth or scaling efforts.

4. Due Diligence Notes:

• Investigate the composition and maturity profile of the substantial trade creditors (£330,651) and the company’s plans for settlement or refinancing.
• Verify the collectability of debtors (£47,237) and the valuation basis for stock (£170,000), as these materially affect current asset valuation and liquidity.
• Review the company’s cash flow forecasts and funding arrangements to assess ongoing viability given the operating losses and negative net assets.
• Assess the director’s strategy and business plan to address losses and improve profitability.
• Confirm no undisclosed contingent liabilities or related party transactions that might impact financial stability.