STARMES PROPERTY SERVICES LTD

Executive Summary

Starmes Property Services Ltd, a newly established private limited company in the real estate agency sector, shows early stage operational and financial challenges, notably negative working capital and limited cash reserves. While regulatory compliance and positive net assets are reassuring, the high liquidity risk and reliance on director loans warrant close scrutiny. Further due diligence on cash flows, debtor quality, and loan arrangements is recommended to fully assess the company's financial stability and operational viability.

STARMES PROPERTY SERVICES LTD - Analysis Report

Company Number: 14848906

Analysis Date: 2025-07-29 17:43 UTC

1. Risk Rating: HIGH
   The company exhibits a high risk level primarily due to its negative net working capital, limited cash reserves, and relatively high short-term liabilities compared to current assets. Additionally, as a newly incorporated entity with only one financial period reported, there is limited financial track record to establish operational stability.

2. Key Concerns:

• Liquidity Risk: The company has net current liabilities of £13,643 and cash on hand of only £704, indicating potential short-term liquidity challenges to meet immediate obligations.
• Negative Working Capital: Current liabilities (£27,636) significantly exceed current assets (£13,993), which could strain day-to-day operations and cash flow management.
• Dependence on Director Loans: The presence of a director’s loan account (£506) with no formal repayment terms could mask underlying cash flow issues and may pose governance concerns if relied upon for liquidity support.

3. Positive Indicators:

• Positive Net Assets: Despite liquidity concerns, the company reports net assets of £8,851, reflecting some equity buffer primarily derived from retained earnings.
• No Overdue Filings: The company is compliant with filing deadlines for both accounts and confirmation statements, reducing regulatory risk.
• Sufficient Capitalization: Share capital of £10 is minimal but consistent with a micro-entity; no indication of excessive leverage beyond the director’s loan and borrowings.

4. Due Diligence Notes:

• Cash Flow Projections: Investigate short-term cash flow forecasts and sources of working capital to assess if the company can cover immediate liabilities.
• Debtor Quality: Review aging and collectability of trade debtors (£12,301) to understand potential impairment risks and actual cash inflows.
• Loan Terms and Support: Clarify terms of loans and director’s loan account, including any contingent liabilities or informal arrangements that affect financial stability.
• Operational History and Revenue: Obtain detailed business activity data to assess sustainability beyond the first financial period reported.
• Governance & Control: As a single-person majority shareholder and director, consider the company's governance framework and risk of control concentration.