Company Number: 13139085

Analysis Date: 2025-07-20 13:49 UTC

1. Risk Rating: HIGH

Justification: The company exhibits significant net liabilities as of the latest financial year end, with shareholders’ funds deteriorating from positive to substantially negative within a short period. Current liabilities exceed current assets by a sizeable margin, and the company carries considerable long-term creditors. The cash balance is low relative to liabilities, indicating liquidity strain. These factors combined suggest a heightened risk of solvency issues.

2. Key Concerns:

• Negative Net Assets: Shareholders’ funds moved from £40k positive in 2023 to approximately £44k negative in 2024, indicating accumulated losses and erosion of equity.
• Working Capital Deficit: Current liabilities (£87k) significantly exceed current assets (£33k), with cash holdings particularly low at £2.6k, raising concerns about ability to meet short-term obligations.
• Long-Term Creditors: The presence of £87k in creditors due after more than one year suggests reliance on external financing or deferred payments, adding pressure on cash flows and solvency.

3. Positive Indicators:

• Compliance: Accounts and confirmation statements are up to date with no overdue filings, indicating regulatory adherence and good governance procedures.
• Operational Continuity: The company remains active since incorporation in 2021 and employs 2 people, including directors, showing ongoing business activity.
• Industry Focus: Operating in construction of domestic buildings (SIC 41202) — a sector with consistent demand generally supportive of steady revenues if well managed.

4. Due Diligence Notes:

• Examine detailed contract performance and revenue recognition policies due to use of stage of completion accounting, which can affect reported turnover and profitability.
• Investigate the nature and terms of the long-term creditors to assess repayment schedules, interest obligations, and any covenants that could impact financial stability.
• Review cash flow statements and management forecasts to assess liquidity management and the company’s ability to fund working capital needs.
• Assess directors’ plans to address the negative equity position and whether additional capital injections or restructuring is anticipated.