SHAPE STUDIOS DURHAM LIMITED

Executive Summary

Shape Studios Durham Limited is a recently incorporated micro-entity operating in the fitness sector with a capital-intensive asset base but significant liquidity constraints. The company exhibits high solvency and liquidity risks given negative working capital and limited operational scale. While regulatory compliance is current and director control is clear, further scrutiny of cash flow management and business sustainability is recommended before considering investment.

SHAPE STUDIOS DURHAM LIMITED - Analysis Report

Company Number: 14719200

Analysis Date: 2025-07-29 18:02 UTC

1. Risk Rating: HIGH

Justification: The company has negative net current assets of £82,644 indicating a liquidity shortfall, and minimal net assets (£2,414) relative to fixed assets. The business is newly incorporated (less than 1.5 years old), employs only one person (the director), and operates in a sector (fitness facilities) that can be capital intensive with uncertain cash flows. These factors combined signal elevated solvency and operational risks at this early stage.

2. Key Concerns:

• Liquidity risk: Current liabilities (£43,754) exceed current assets (negative £38,949), implying an inability to cover short-term obligations without additional financing.
• Operational scale and sustainability: Single employee (director) and micro-entity size restrict operational capacity and resilience.
• Limited financial transparency: Micro-entity filing regime exempts the company from providing profit and loss details or audit, limiting insight into profitability and cash flow.

3. Positive Indicators:

• Director control and continuity: The sole director, Lucy May Walton, owns 75-100% shares and voting rights, ensuring centralized decision-making and control.
• No overdue filings: Accounts and confirmation statements are filed on time, showing compliance with regulatory obligations.
• Fixed asset base: The company holds fixed assets of £86,058, which can support operational activities or be leveraged.

4. Due Diligence Notes:

• Investigate the composition and liquidity of current liabilities and whether any are overdue or at risk of enforcement.
• Review cash flow projections and capital raising plans to confirm ability to meet short-term liabilities.
• Assess business model viability and market positioning given the fitness industry's competitive landscape.
• Confirm absence of related party transactions or director loans that may impact financial stability.
• Monitor ongoing compliance with filing deadlines, governance, and any changes in director status.