SPARC RETAIL LTD

Executive Summary

SPARC RETAIL LTD displays significant financial distress evidenced by large negative net current assets and net liabilities, coupled with declining cash balances and minimal operational scale. While the company is compliant with statutory filings and benefits from concentrated ownership, its current financial position raises high solvency and liquidity risks. Further detailed financial and operational investigation is recommended to evaluate recovery prospects and ongoing viability.

SPARC RETAIL LTD - Analysis Report

Company Number: 14155728

Analysis Date: 2025-07-29 19:51 UTC

1. Risk Rating: HIGH

The company exhibits a high risk profile primarily due to its deteriorating financial position, manifested by significant negative net current assets and net liabilities. The balance sheet shows worsening solvency and liquidity concerns, which pose substantial risk to creditors and investors.

2. Key Concerns:

• Negative Net Current Assets and Net Liabilities: As of 30 June 2024, SPARC RETAIL LTD reports net current liabilities of £4,555 and net liabilities (negative shareholders’ funds) of £3,781, indicating the company’s current liabilities significantly exceed its current assets and overall net worth.
• Declining Cash Balances: Cash at bank decreased from £125 in 2023 to £41 in 2024, suggesting potential liquidity stress and limited cash reserves to meet short-term obligations.
• Small Scale and Limited Operational Footprint: With only one employee and minimal fixed assets, the company appears to have very limited operational scale, which may impair its ability to generate sufficient revenue to improve its financial position.

3. Positive Indicators:

• Timely Filing and Compliance: The company is current with both its accounts and confirmation statement filings, indicating good regulatory compliance and governance in terms of statutory obligations.
• Single Controlling Shareholder: Mr Andrew Mark Rayner holds 75-100% ownership and voting control, which could allow for agile decision-making and potential capital injections if required.
• Industry Positioning: The company operates in management consultancy for FMCG and manufacturing of soap and detergents, sectors that could present growth opportunities if managed effectively.

4. Due Diligence Notes:

• Examine Underlying Causes of Negative Equity: Investigate the drivers behind the negative net assets and whether these arise from accumulated losses or accounting adjustments.
• Review Cash Flow Statements: Obtain cash flow data to assess operational cash generation and timing of liabilities repayment.
• Assess Revenue and Profitability Trends: Since income statement details are not provided, determine whether the company is generating positive earnings or incurring losses.
• Evaluate Director’s Financial Support: Clarify if the sole director/shareholder has provided or plans to provide further financial support to stabilize the company.
• Confirm Operational Viability: Understand business model sustainability given the very small scale and whether there are plans for growth or restructuring.

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