Company Number: 13504660

Analysis Date: 2025-07-20 14:48 UTC

1. Risk Rating: HIGH
   The company shows significant solvency concerns, with net current liabilities exceeding £1 million each year and negative shareholders’ funds worsening from approximately -£7k in 2022 to -£42k in 2024. The current liabilities dwarf current assets, indicating difficulty in meeting short-term obligations.

2. Key Concerns:

• Solvency and Liquidity: Persistent and substantial negative net current assets (~£1 million deficit) suggest the company cannot cover short-term liabilities with available current assets, posing a serious liquidity risk.
• Negative Equity Position: Shareholders’ funds have deteriorated notably over three years, reflecting accumulated losses or obligations not supported by equity capital.
• Related Party Transactions: Material balances due to and from related parties (notably £48k owed to related parties and a prior receivable of £820k) warrant scrutiny to assess the nature and sustainability of these transactions and their impact on financial stability.

3. Positive Indicators:

• Investment Property Asset: The company holds a fixed asset (investment property) valued at approximately £988k, which is stable and not materially different from cost, potentially providing some security or collateral.
• Compliance with Filing: All statutory accounts and confirmation statements are filed on time with no overdue filings, indicating sound regulatory compliance.
• Experienced Director: The sole director is a Chartered Accountant, which suggests professional oversight of financial reporting and governance.

4. Due Diligence Notes:

• Investigate the composition and terms of current liabilities exceeding £1 million, including whether they are repayable on demand or subject to refinancing arrangements.
• Clarify the nature and recoverability of debtor balances, especially related party receivables, and their impact on cash flows.
• Assess the company’s cash flow projections and strategy to address the ongoing working capital deficit and negative net assets.
• Review any contingent liabilities or off-balance sheet commitments that could exacerbate financial risk.
• Understand the business model and revenue generation from the investment property to evaluate operational sustainability.