LOZACK LIMITED

1. Risk Rating: MEDIUM

The company reports positive and growing net assets and holds a cash reserve, but current liabilities exceed current assets by £1.16m, creating a reliance on fixed-asset realisation or debtor collection to meet short-term obligations. Statutory filings are currently up to date.

2. Key Concerns

• Net current liability position: Current assets total £1.56m against creditors due within one year of £2.73m, resulting in net current liabilities of £1.16m. The company’s ability to settle all short-term obligations as they fall depends on converting fixed assets or collecting debtors rather than on liquid resources alone.
• Concentration in investment property: Investment property of £3.02m represents approximately 93% of total fixed assets. Reported net assets are therefore sensitive to property valuations, and the filed data does not indicate whether the valuation is externally supported.
• Exposure to a loss-making subsidiary: One wholly owned subsidiary is reported with negative aggregate capital and reserves and a loss for the year. The extent to which the parent may be required to provide financial support is not fully detailed in the filleted accounts.

3. Positive Indicators

• Shareholders’ funds have increased consistently over the reported period, from £129,168 in 2016 to £2,040,968 in 2025.
• Cash at bank of £1.29m provides a buffer against near-term obligations.
• All Companies House filings appear to be current, with no overdue accounts or confirmation statements.
• Other subsidiaries are reported as profitable, contributing to group value.

4. Due Diligence Notes

• Obtain a breakdown of the £2.73m creditors falling due within one year, including any intercompany balances, director loan accounts, taxation, or trade creditors, and assess repayment terms and any security held.
• Establish the basis and date of the investment property valuation and whether any charge has been granted over the property.
• Review the financial position and trading outlook of the loss-making subsidiary to determine the likelihood of future funding calls from the parent.
• Request management accounts or an income statement, as the profit and loss account was not delivered with the filleted accounts, to assess operating cash generation.
• Clarify the activities and financial contribution of the remaining subsidiaries referenced in the accounts.