YORKARE HOMES (SLEAFORD) LIMITED

Executive Summary

Yorkare Homes (Sleaford) Limited presents a high risk profile due to significant liquidity and solvency challenges, characterized by large current liabilities and negative net assets. The company’s survival hinges on continued group support, which underpins its going concern assumption. While regulatory compliance and audit quality are positive factors, investors should carefully scrutinize intercompany financing and operational sustainability before engagement.

YORKARE HOMES (SLEAFORD) LIMITED - Analysis Report

Company Number: 14007314

Analysis Date: 2025-07-29 20:49 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity risks, with net current liabilities exceeding £8.4 million and net negative shareholders' funds. Despite being supported by a parent group, the financial position is weak and dependent on external support to meet obligations.

2. Key Concerns:

• Severe Working Capital Deficit: Current liabilities (£8.75m) vastly exceed current assets (£271k), indicating critical short-term liquidity constraints.
• Negative Net Assets: Shareholders' funds are negative (£144k), reflecting accumulated losses and a weak capital base.
• Reliance on Group Support: The company depends on continued financial backing from Yorkare Group (Holdings) Ltd, its sole shareholder and main creditor, suggesting potential risk if group support is withdrawn.

3. Positive Indicators:

• Unqualified Audit Opinion: The auditor has issued an unqualified report, indicating financial statements comply with accounting standards and give a true and fair view.
• Growing Asset Base: Tangible fixed assets increased slightly to £8.58m, showing investment in operational capacity.
• No Overdue Filings: Both accounts and confirmation statements are filed on time, showing regulatory compliance and good governance practices.

4. Due Diligence Notes:

• Clarify the nature and terms of intercompany balances, especially the large creditor amount owed to group undertakings (£8.47m) and debtor balance (£185k).
• Assess the sustainability of ongoing group support, including any formal agreements or guarantees.
• Review cash flow forecasts and management plans addressing the significant liquidity shortfall.
• Investigate the operational performance and profitability trends, noting the company incurred a loss of £47k in the latest year despite asset growth.
• Examine security arrangements given the bank's charges and multilateral guarantees involving multiple group companies.