Company Number: 13627056

Analysis Date: 2025-07-29 16:08 UTC

1. Risk Rating: MEDIUM
   The company shows a balanced but minimal net asset position and its current assets and liabilities are nearly equal, indicating limited working capital buffer. The presence of significant related party transactions and deferred consideration through loan notes introduces counterparty and liquidity risks. However, the company is active, compliant with filing deadlines, and has an unqualified auditor’s report, supporting operational and regulatory stability.

2. Key Concerns:

• Liquidity Tightness: Current assets (£1,092,024) and current liabilities (£1,092,014) virtually offset, leaving only £10 net current assets, which is insufficient for operational flexibility or unexpected cash needs.
• Related Party Balances and Deferred Consideration: Significant amounts owed to and from related parties (notably the Employee Ownership Trust and loan notes of £6.7m deferred consideration) may affect cash flows and introduce dependency risks on these entities’ ability to meet obligations.
• Limited Equity Base: Minimal share capital (£100) and net assets (£100) suggest very thin equity, which may constrain resilience against financial shocks or losses in subsidiaries.

3. Positive Indicators:

• Compliance and Governance: The company is active with no overdue filings, and accounts are prepared under UK GAAP with an unqualified audit report, indicating good regulatory compliance and transparency.
• Going Concern Acknowledged: Directors’ report confirms preparation of accounts on a going concern basis, suggesting management confidence in ongoing operations.
• Employee Ownership Structure: Transition to an Employee Ownership Trust may improve long-term stability, engagement, and governance through shared ownership incentives.

4. Due Diligence Notes:

• Investigate the nature and terms of the deferred consideration and loan notes between the company and the Employee Ownership Trust, including redemption schedules and impact on cash flows.
• Review subsidiary (Mayflowerstone Limited) financial health and its impact on the parent company, especially given the subsidiary’s reported loss (£141,904) and substantial reserves.
• Assess the company’s cash flow projections and working capital management to confirm ability to meet short-term liabilities given the minimal net current assets.
• Confirm the operational role and financial interdependencies between Stone Alliance Ltd and related entities, particularly Mayflower Group Limited and the Employee Ownership Trust.
• Consider the implications of the very low share capital and net asset base on future capital raising or creditworthiness.