Company Number: 14175288

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

1. Risk Rating: MEDIUM

Justification: WNA Cottages Ltd shows a positive turnaround in net assets from negative (£-62,252) in 2023 to a slight positive (£15,675) in 2024, indicating improving solvency. However, the company exhibits significant negative net current assets (working capital deficit) of approximately £312k and substantial long-term liabilities (£495k bank loans), which pose liquidity and leverage concerns for such a young business incorporated in 2022.

2. Key Concerns:

• Negative net current assets persist, reflecting potential short-term liquidity stress despite a large cash balance (£100k) which may be earmarked or insufficient for obligations.
• High level of long-term debt (£495k) relative to modest equity and net assets suggests financial leverage risk and reliance on external financing.
• Limited operational history (only 2 years) and very small employee base (2 employees), with no detailed turnover or profit data disclosed, making assessment of ongoing operational sustainability challenging.

3. Positive Indicators:

• Significant fixed assets (£823k), primarily investment properties carried at fair value, which provide asset backing and potential collateral for loans.
• Directors have confirmed no material uncertainty regarding going concern, indicating internal confidence in business continuity.
• Timely filing of accounts and confirmation statement, signaling compliance with regulatory requirements and good governance practices.

4. Due Diligence Notes:

• Obtain turnover, profitability, and cash flow details to assess actual trading performance and operational viability beyond balance sheet figures.
• Investigate terms and covenants of the bank loans to understand repayment schedules, interest obligations, and any risks of breach.
• Clarify nature and market value stability of investment properties, including occupancy rates and rental income sustainability in the holiday accommodation sector.
• Review directors’ background and any related party transactions given the company is closely held by two directors who are also PSCs.