Company Number: 13815558

Analysis Date: 2025-07-29 13:56 UTC

1. Risk Rating: MEDIUM
   The company shows growth in net current assets and shareholders’ funds from £1,072 in 2022 to £172,718 in 2023, which is positive. However, a high level of debtors (accounts receivable) relative to cash and the presence of loans to an associated company present liquidity risks. The company is relatively new, with limited historical data, increasing uncertainty.

2. Key Concerns:

• Liquidity Risk: Cash on hand is very low (£138 in 2023) compared to current liabilities (£225,327), relying heavily on collection of debtors (£397,857). Delays or defaults in debtor payments could impair solvency.
• Related Party Exposure: Significant loans to an associated company (£397,857) create concentration risk. Recovery depends on the associated company’s financial health and may not be readily available.
• Concentration of Control and Creditors: Two individuals (PSC’s) own 25-50% shares each and also appear as creditors (£50,507 and £50,508 respectively). This may indicate inter-company financing and potential related party conflicts requiring scrutiny.

3. Positive Indicators:

• Improved Net Assets: Substantial increase in net assets and working capital in 2023 indicates some operational or financial improvement.
• Compliance: No overdue filings reported for accounts or confirmation statements, demonstrating regulatory compliance.
• Small Company Reporting: Filing under small companies regime with exemption from audit reduces complexity and cost, appropriate for size and age.

4. Due Diligence Notes:

• Verify the collectability and age profile of debtors, especially the large balance due from the associated company.
• Review terms and conditions of loans to the associated company and related party creditors to assess repayment risk.
• Investigate the financial position and creditworthiness of the associated company to which funds are loaned.
• Confirm that director and PSC interests and transactions are properly disclosed and approved to mitigate governance risks.
• Assess cash flow projections to understand if current liquidity is sufficient to meet obligations.
• Consider obtaining more recent management accounts or cash flow statements for a current view.