Company Number: 14458432

Analysis Date: 2025-07-29 12:10 UTC

1. Risk Rating: MEDIUM

The company demonstrates ongoing operations with substantial turnover and positive operating profit, but its balance sheet reveals significant liquidity concerns and minimal net equity, which elevate solvency risk.

2. Key Concerns:

• Negative net current assets of approximately £1.5 million indicate potential short-term liquidity difficulties in meeting obligations as they fall due.
• Large long-term borrowings (£4.53 million) relative to very modest net assets (£75k) suggest high leverage and potential solvency pressure.
• Profit after tax is marginal (£75k) despite strong turnover, which may limit the ability to build reserves or absorb financial shocks.

3. Positive Indicators:

• Healthy turnover exceeding £8 million and positive operating profit (£1.37 million) indicate viable business operations.
• Directors’ report confirms acquisition and consolidation of Juvela Limited, showing active business growth and group structure.
• Timely filing of accounts and confirmation statements with no overdue filings, reflecting regulatory compliance.

4. Due Diligence Notes:

• Review the terms, covenants, and maturity profile of bank loans to assess refinancing risk and potential impact on solvency.
• Investigate the composition and collectability of trade debtors (£1.56 million) and other debtors (£0.44 million) to evaluate liquidity quality.
• Examine group structure and intercompany transactions with controlling PSC entities (Tooru Plc and S-Ventures Plc) to understand financial support or exposure.
• Assess goodwill and intangible asset valuation and impairment testing given significant intangible assets (£5.78 million).