M A CHIRO LIMITED
Company number 06684902 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Risk Assessment: M A CHIRO LIMITED
1. Risk Rating: LOW-MEDIUM
The company demonstrates a fundamentally strong balance sheet with minimal liabilities and substantial cash reserves. However, specific concerns around inter-company receivables, director loan arrangements, and an outdated property valuation introduce moderate uncertainty that prevents a straightforward LOW rating. The overall financial position remains sound, but certain items require clarification.
2. Key Concerns
Concern 1: Significant Inter-Company Receivables (£380,264)
The debtors balance includes £380,264 "owed by group undertakings," classified as falling due after more than one year. This represents approximately 20% of total assets and raises questions about capital allocation to related entities. The recoverability of this balance is dependent on the financial health of those group undertakings, which cannot be assessed from the available information. Related-party balances of this magnitude can obscure the true liquidity position and may indicate value extraction or cross-subsidisation within a group structure.
Concern 2: Director's Outstanding Loan (£95,210)
Dr M name shown to subscribers maintains an outstanding loan from the company of £95,210 (reduced from £117,695 in the prior year). While the balance is declining and interest is being charged, this represents a material sum relative to current liabilities (£37,778) and raises governance questions. Director loans of this nature can signal blurred boundaries between personal and company finances, and the terms, repayment schedule, and compliance with Companies Act provisions (particularly Section 197 requirements for shareholder approval) should be verified.
Concern 3: Outdated Investment Property Valuation
The investment property is carried at £725,000 based on valuations dating from 2016-2019, with no evidence of a more recent independent assessment. Under the fair value model adopted, this asset should reflect current market conditions. A five-year-old valuation in a potentially volatile property market introduces material uncertainty about the accuracy of the balance sheet. An overvaluation could inflate both total assets and shareholders' funds, overstating the company's true net worth by a significant margin.
3. Positive Indicators
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Exceptional Liquidity Position: Current assets of £1,085,909 against current liabilities of just £37,778 yields a current ratio of approximately 28.7:1. The company faces no near-term solvency pressure.
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Minimal Leverage: Total liabilities represent only approximately 2% of total assets. The company operates with virtually no debt, eliminating conventional solvency risk.
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Substantial Cash Reserves: Cash at bank of £555,146 provides a meaningful buffer and indicates the business is generating or retaining sufficient funds to meet obligations.
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Consistent Long-Term Growth: Shareholders' funds have grown from £450,803 in 2015 to £1,820,140 in 2024, demonstrating a sustained trajectory of value creation over nearly a decade.
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Regulatory Compliance: All filings are current and not overdue. The company has maintained its active status for over 16 years since incorporation in 2008, suggesting operational stability.
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Declining Liabilities: Total liabilities have reduced significantly from £326,724 in 2019 to £37,778 in 2024, indicating disciplined liability management.
4. Due Diligence Notes
| Item | Investigation Required |
|---|---|
| Group Undertakings Receivable | Identify the specific group companies owing £380,264. Obtain their latest accounts to assess recoverability. Clarify the nature of these inter-company arrangements and whether formal repayment terms exist. Determine why this is classified as due after more than one year. |
| Director Loan Compliance | Verify whether shareholder approval was obtained per Companies Act s.197. Review the loan agreement terms, interest rate applied, and repayment schedule. Confirm the loan is not in breach of the company's articles of association. |
| Investment Property Valuation | Request or commission an updated independent valuation. The 2019 valuation predates significant economic shifts including the pandemic and interest rate changes. Assess whether the carrying value of £725,000 remains supportable. |
| Profitability Trend | The income statement has not been delivered (permitted under s.444 for small companies), but shareholders' funds declined by approximately £108,000 from 2023 to 2024. Investigate whether this reflects trading losses, dividend payments, or other movements. The fair value reserve remains unchanged at (£40,887), suggesting no property revaluation occurred. |
| Ownership Structure | name shown to subscribers controls 50-75% of shares with the right to appoint and remove directors, creating significant concentration of power. Understand the relationship between the two PSCs and whether governance arrangements provide adequate checks and balances. |
| Cash Flow Trajectory | Cash has declined from a peak of £857,357 (2020) to £555,146 (2024). While still substantial, this represents a 35% reduction over four years. Investigate the underlying causes and whether this trend is expected to continue. |