TOTS TREEHOUSE DAY NURSERY LTD

Executive Summary

TOTS TREEHOUSE DAY NURSERY LTD is a micro-entity operating in child day-care activities with recent improvements in liquidity and solvency after initial negative net assets. The company maintains good regulatory compliance but remains small with limited financial history and some governance risks related to director changes and concentrated control. Further due diligence on cash flow sustainability and management stability is recommended to fully evaluate operational resilience.

TOTS TREEHOUSE DAY NURSERY LTD - Analysis Report

Company Number: 13125186

Analysis Date: 2025-07-20 12:23 UTC

1. Risk Rating: MEDIUM

Justification: The company shows a significant improvement in net current assets from a negative position in 2023 to a positive £9,509 in 2024, indicating recent strengthening of liquidity. However, the absolute value remains modest, reflecting the micro-entity scale with limited capital (£3 share capital) and small asset base. The company is relatively new (incorporated 2021), with minimal historical data to assess operational stability long-term. No overdue filings or liquidation status mitigate regulatory risk at this stage.

2. Key Concerns:

• Limited Financial History and Scale: As a micro-entity incorporated in 2021, the company has little financial track record and a very small share capital base, which may limit resilience to operational or market shocks.
• Prior Year Negative Net Assets: The accounts for 2023 show negative net assets (-£1,479), which raises concerns about historical solvency before recent improvements.
• Director Changes and Control Concentration: Multiple appointments and resignations of directors within a short period, combined with two individuals holding significant control (25-50% shares and voting rights each), may pose governance and continuity risks.

3. Positive Indicators:

• Current Solvency Improvement: Net current assets turned positive (£9,509) in 2024, indicating ability to meet short-term liabilities as of the latest accounts.
• Compliance Status: All statutory filings including accounts and confirmation statements are up to date with no overdue reports, reducing regulatory compliance risk.
• Operational Activity Evidenced: Increase to an average of 4 employees in 2024 from zero previously suggests business activity and possible growth in operations.

4. Due Diligence Notes:

• Investigate the nature of the recent increase in current assets and whether it reflects sustainable revenue growth or temporary cash injections (e.g., loans or capital contributions).
• Review cash flow statements or management accounts if available to assess ongoing liquidity management and operational cash generation.
• Assess director stability and governance practices given the recent changes in appointments and concentration of control to understand potential risks to management continuity.
• Confirm no undisclosed liabilities or contingent risks exist given the previously negative net asset position.