THE COSY COLLECTION LTD

Executive Summary

THE COSY COLLECTION LTD presents a high-risk profile due to significant negative net assets and substantial long-term liabilities exceeding asset values. While the company maintains regulatory compliance and possesses valuable fixed assets, its liquidity and solvency concerns warrant careful scrutiny of debt terms and cash flow sustainability. Close due diligence is advised to clarify the viability of ongoing operations and financial recovery plans.

THE COSY COLLECTION LTD - Analysis Report

Company Number: 13132389

Analysis Date: 2025-07-20 11:23 UTC

1. Risk Rating: HIGH
   Justification: The company exhibits significant net liabilities, with negative shareholders' funds worsening from -£31,494 in 2023 to -£16,906 in 2024. The long-term liabilities exceed £1.38 million, heavily outweighing current assets (~£11,266) and cash reserves (~£4,343), indicating potential solvency and liquidity challenges.

2. Key Concerns:

• Solvency Risk: The net liabilities position and substantial long-term loans raise concerns about the company's ability to meet debt obligations without additional capital injection or asset disposals.
• Liquidity Constraints: Current assets and cash balances are minimal relative to current and long-term liabilities, which could impair short-term operational funding and creditor payments.
• Dependence on Loans: Large loans (M4G1C loans totaling over £1.18 million) and director or related party loan arrangements suggest reliance on external financing which may not be sustainable long term.

3. Positive Indicators:

• Asset Base: The company holds tangible fixed assets valued at approximately £1.36 million, primarily land and buildings, which could provide collateral or be monetized if necessary.
• No Overdue Filings: The company is current with statutory accounts and confirmation statement filings, indicating compliance with regulatory requirements.
• Stable Management: Directors have been in place since incorporation with no disqualifications noted, suggesting governance stability.

4. Due Diligence Notes:

• Verify terms, interest rates, and repayment schedules of the M4G1C loans and other creditor arrangements to assess refinancing risks.
• Investigate the company's cash flow projections and operational profitability to understand if it can service debts and improve its financial position.
• Review the nature and marketability of the tangible fixed assets, particularly the land and buildings, to evaluate their liquidity value.
• Confirm the related party transactions, including director loans, to assess potential conflicts of interest or financial support.
• Assess the company's business model sustainability given current financial stresses and whether any restructuring or additional capital injections are planned.