Company Number: 12434875

Analysis Date: 2025-07-29 20:16 UTC

1. Risk Rating: MEDIUM
   Justification: Willow Rose Properties Ltd shows improvement in net assets from a negative position (£-11,353 in 2023) to a positive £33,489 as at January 2024, primarily due to a significant revaluation gain on investment property (£50,420). However, the company continues to report negative net current assets (£-47,698), indicating liquidity pressure, and has substantial long-term secured bank loans (£148,813). The company is relatively young (incorporated 2020) with limited operational history.

2. Key Concerns:

• Liquidity Risk: The company has negative net current assets for multiple years, with current liabilities (£49,270) far exceeding current cash (£1,572), raising concerns about its ability to meet short-term obligations without refinancing or asset sales.
• High Leverage: The presence of significant secured bank loans (£148,813) relative to net assets and limited equity (share capital £2) signals high gearing, increasing solvency risk if property values fall or income streams weaken.
• Limited Financial Transparency: Accounts are abridged and unaudited, with no income statement filed, restricting insight into profitability drivers and cash flow generation, complicating risk assessment.

3. Positive Indicators:

• Asset Revaluation Gains: The investment property has appreciated from £179,580 (2023) to £230,000 (2024), improving the balance sheet strength and potentially enhancing borrowing capacity.
• Profitability Improvement: The company reported a profit for the year of £44,842 (included in retained earnings), marking a turnaround from prior losses, suggesting operational progress.
• Compliance Status: Filing deadlines for accounts and confirmation statements are up to date, indicating adherence to regulatory requirements and good governance on statutory filings.

4. Due Diligence Notes:

• Investigate the nature of the investment property portfolio and the sustainability of valuations, preferably through independent appraisals, to validate asset values underpinning the balance sheet.
• Review underlying cash flow statements or management accounts to assess the company’s ability to service current liabilities and debt obligations, given the negative working capital position.
• Clarify the terms and covenants of the secured bank loans and any refinancing risk, including repayment schedules and lender relationships.
• Confirm the absence of director disqualifications, legal proceedings, or contingent liabilities not disclosed in the abridged accounts.
• Assess the business model and revenue streams supporting profitability, especially given the absence of an income statement in the public filings.