THE IRVINE DIET CENTRE LTD

Executive Summary

The Irvine Diet Centre Ltd shows a high risk profile characterized by sustained negative net assets and working capital deficits indicating solvency and liquidity challenges. While the company remains compliant with filings and retains a positive cash balance, the negative debtor balances and significant liabilities raise concerns about operational stability. Further due diligence is essential to understand the causes of these financial stress indicators and the company’s plans to restore financial health.

THE IRVINE DIET CENTRE LTD - Analysis Report

Company Number: SC699944

Analysis Date: 2025-07-29 20:25 UTC

1. Risk Rating: HIGH
   The company exhibits significant financial distress with persistent negative net current assets and shareholders’ funds worsening over the last three years. The large current liabilities relative to assets and negative debtor balances indicate solvency and liquidity risks.

2. Key Concerns:

• Persistent and increasing net current liabilities: The net current assets deteriorated from -£10,954 in 2021 to -£34,575 in 2024, indicating worsening working capital and inability to cover short-term obligations.
• Negative and fluctuating debtor balances: In 2024, debtors are shown as negative (£-9,908), which may suggest accounting irregularities, receivables write-offs, or data errors, raising concerns about cash flow reliability.
• Substantial creditor balances and reliance on other creditors: Current liabilities remain high (~£30k), with a significant portion listed as “other creditors” (£25,084 in 2024), potentially indicating unpaid trade or accruals that could pressure operations.

3. Positive Indicators:

• The company is current with statutory filings (accounts and confirmation statement), demonstrating compliance with regulatory requirements.
• Cash balance remains positive (~£2,470 in 2024), albeit small, which may support short-term liquidity.
• Sole director and 75-100% shareholder control by Mrs. Pauline Singleton may facilitate swift decision-making and operational control.

4. Due Diligence Notes:

• Clarify the nature and cause of negative debtor balances in 2024, including review of accounting treatment and recoverability of receivables.
• Assess the composition and aging of current liabilities, especially “other creditors,” to determine potential payment pressures or disputes.
• Evaluate cash flow forecasts and working capital management plans to understand how the company intends to resolve its negative equity position.
• Investigate business model sustainability given the ongoing losses and whether there are plans for capital injection or restructuring.
• Confirm absence of director disqualifications or legal proceedings that may affect governance.