Company Number: 12737498

Analysis Date: 2025-07-29 12:09 UTC

1. Risk Rating: HIGH

Justification: The company displays a precarious financial structure characterized by current liabilities (£750,687) vastly exceeding current assets (£47,315) leading to negative working capital, despite a modest improvement in net current assets. The company’s net assets are marginal (£22,040) relative to the scale of liabilities, indicating a highly leveraged position. The dependency on director support for going concern status also signals elevated financial risk.

2. Key Concerns:

• Liquidity Risk: The current liabilities significantly exceed current assets, which raises concerns about the company’s ability to meet short-term obligations without external support.
• Solvency Risk: The presence of long-term creditors (£750,687) nearly equaling fixed assets suggests heavy indebtedness and limited equity buffer.
• Going Concern Reliance: The financial statements explicitly state the company depends on continued director support, implying potential risk if such support were withdrawn.

3. Positive Indicators:

• Asset Base: Ownership of a freehold property valued at £741,896 provides substantial tangible asset backing.
• Compliance Status: No overdue filings or accounts, indicating timely regulatory compliance.
• Operational Activity: An increase in current assets and net assets from prior years suggests some financial improvement.

4. Due Diligence Notes:

• Investigate the nature and terms of the substantial creditor liabilities (both current and long-term) to understand repayment schedules and covenants.
• Review cash flow statements or management accounts to assess actual liquidity and cash generation.
• Confirm the extent and form of director support, including any formal guarantees or funding arrangements.
• Assess the market value and liquidity of the fixed asset (freehold property) to verify asset realizability.
• Consider obtaining more detailed information on revenue, expenses, and profitability trends beyond the micro-entity accounts.