Company Number: 13887604

Analysis Date: 2025-07-20 17:09 UTC

1. Risk Rating: LOW-MEDIUM
   The company has recently moved from negative to positive net current assets and shareholders’ funds, indicating improving financial health. However, the company's young age (incorporated 2022) and relatively small scale with modest share capital require cautious optimism.

2. Key Concerns:

• Past Negative Net Assets: The 2023 accounts show net current liabilities and negative shareholders’ funds (approx. -£42k), indicating prior solvency challenges.
• Concentration of Control: One entity, Francis & Francis Holdings Limited, holds 75-100% ownership and voting rights, which may limit governance diversity and increase control risk.
• Reliance on Amounts Owed to Group Undertakings: Significant current liabilities (£114k in 2024) owed to group undertakings may imply intra-group funding dependency rather than external debt, which could affect liquidity if group support diminishes.

3. Positive Indicators:

• Improved Liquidity Position: Current assets increased to £314k with cash of £236k as of June 2024, against current liabilities of £215k, resulting in positive net current assets of £98k. This suggests the company can meet short-term obligations.
• No Overdue Filings: Accounts and confirmation statements are up to date, indicating compliance with statutory requirements and good governance practice.
• Stable Employment Base: The company maintained an average of 6 employees during the year, consistent with its classification and business scale.
• Going Concern Basis: Directors confirm preparing accounts on a going concern basis, supported by the turnaround in net assets.

4. Due Diligence Notes:

• Examine detailed cash flow statements and projections to confirm sustainability of liquidity improvements and assess working capital management.
• Investigate the nature and terms of intra-group balances (amounts owed to group undertakings) to evaluate dependency risks.
• Review director backgrounds and any potential conflicts of interest due to concentrated ownership.
• Assess client base and contract terms given the company operates as an employment placement agency (SIC 78109), to understand revenue stability and exposure to market fluctuations.
• Confirm that no contingent liabilities or off-balance sheet risks exist that could impair solvency.