SKY PARK FARM LTD

Executive Summary

Sky Park Farm Ltd exhibits heightened financial risk due to negative net equity and a substantial increase in liabilities, particularly current and long-term debt secured against property. While asset investments and workforce growth indicate ongoing operations, liquidity pressures and solvency challenges warrant careful scrutiny. Further due diligence on debt structures and cash flow dynamics is essential before considering investment.

SKY PARK FARM LTD - Analysis Report

Company Number: 12568168

Analysis Date: 2025-07-20 13:39 UTC

1. Risk Rating: HIGH

The company shows significant solvency risk with negative net assets and shareholders' funds as of the latest accounts. The rapid increase in current liabilities and long-term creditors compared to current assets raises liquidity concerns. Despite operating in diversified activities including real estate and visitor attractions, the financial position suggests operational instability.

2. Key Concerns:

   • Negative Net Assets: Net assets declined from a positive £416k in 2023 to a negative £519k in 2024, indicating the company’s liabilities exceed its assets.
   • High Current Liabilities: Current liabilities increased substantially to £4.67 million in 2024 from £2.43 million in 2023, outpacing current assets and squeezing working capital.
   • Large Long-term Debt: The company holds a significant mortgage secured against farmland, with an outstanding balance of £4.67 million, representing a considerable financial burden over the long term.

3. Positive Indicators:

   • Asset Base Growth: Fixed assets increased markedly from £2.47 million in 2023 to over £4 million in 2024, showing investment in tangible and intangible assets.
   • No Overdue Filings: The company is current on statutory filings for both accounts and confirmation statements, indicating regulatory compliance.
   • Active Business with Growing Workforce: Employee numbers increased from 32 to 49, suggesting business expansion or operational scaling.

4. Due Diligence Notes:

   • Review detailed debt terms, including mortgage covenants and repayment schedules, to assess refinancing risk and cash flow impact.
   • Investigate reasons for the sharp increase in current liabilities and whether these are manageable trade payables, accrued expenses, or short-term borrowings.
   • Analyze cash flow statements and management commentary (if available) to understand operational cash generation and capital expenditure plans.
   • Confirm the valuation and recoverability of intangible assets, which represent a significant portion of fixed assets.
   • Assess the company’s revenue trends and profitability, as this data was not included but is critical to evaluate sustainability.