Company Number: 13168450

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

1. Risk Rating: MEDIUM
   The company holds significant fixed assets in investment property but shows persistent net current liabilities and heavy secured debt. While solvent on a net asset basis, liquidity concerns and substantial long-term borrowings moderate the risk assessment.

2. Key Concerns:

• Negative net current assets (working capital) of approximately £329k as of 2024, indicating potential short-term liquidity pressure.
• High secured bank loans (£666k), mostly long-term but significant relative to net assets (£225k), suggesting leverage risk.
• Reliance on directors’ current accounts as debtors (£54k) which may indicate intra-group funding rather than external receivables.

3. Positive Indicators:

• The company owns investment property valued at £1.28m, stable year-on-year, representing a strong fixed asset base.
• Positive net assets and shareholders’ funds of £225k, indicating solvency on a balance sheet basis.
• Compliance with filing requirements is up to date with no overdue accounts or confirmation statements.

4. Due Diligence Notes:

• Investigate the nature and collectability of debtor balances, especially the directors’ current accounts, to assess true liquidity.
• Review terms and covenants of secured bank loans to understand refinancing risk and repayment schedule.
• Obtain details on cash flow generation from property lettings and operational expenses to evaluate ongoing operational sustainability.
• Confirm any contingent liabilities or off-balance-sheet obligations not evident in the accounts.
• Clarify the valuation approach and supporting evidence for the investment property revaluation reserve to assess asset quality.