RATED PEOPLE LIMITED

Risk Rating: HIGH The company exhibits severe insolvency risk, with net liabilities of £6.7 million and deeply negative shareholders' funds of £31.8 million. It is technically insolvent and dependent on the continued support of its creditors—predominantly its venture capital shareholders—to meet its ongoing liabilities. Additionally, the business is displaying signs of operational contraction and cash burn, compounding the financial instability.

Key Concerns: - Technical Insolvency and Capital Deficiency: Net assets are deeply negative at -£6.7 million, with accumulated losses totaling £31.8 million. The company cannot meet its total liabilities from its assets and is entirely reliant on creditor (likely shareholder) forbearance to continue trading. - Negative Working Capital and Liquidity Squeeze: Current liabilities (£3.01 million) significantly exceed current assets (£1.75 million), resulting in negative working capital of -£1.25 million. Cash reserves declined from £878k to £690k over the six-month reporting period, indicating ongoing cash consumption. - Operational Contraction: Headcount dropped by 20% (from 50 to 40 employees) during the period. Furthermore, the strategic decision to cease capitalising development and website costs from FY25 onwards suggests a pullback in long-term investment, likely driven by cash conservation needs or a shift in the business model.

Positive Indicators: - Institutional Shareholder Support: The presence of Frog Capital Limited as a Person with Significant Control (holding 25-50% of voting rights) strongly suggests that the £6.27 million in long-term creditors represents shareholder loans or convertible debt. Venture capital backing typically implies a long-term view and a willingness to support portfolio companies through cash-burning phases. - Regulatory Compliance: The company is up to date with its filing obligations at Companies House, with accounts and confirmation statements filed on time, showing administrative stability. - Established Market Position: Incorporated in 2005, Rated People Limited is a long-standing brand in the UK home improvement matching sector, suggesting underlying revenue generation capability (both transactional and subscription) and market resilience.

Due Diligence Notes: - Creditor Terms and Going Concern: It is critical to verify the terms of the £6.27 million in long-term creditors. Confirmation is needed on whether these are soft, subordinated shareholder loans with no imminent repayment demands, which would underpin the company's going concern status. - Intangible Asset Disposals: The accounts show a £2.26 million disposal of intangible assets. Investigation is required to determine if this represents an internal group restructuring, a sale of intellectual property, or an impairment write-off, and the cash flow implications thereof. - Director Changes: Note the resignation of Andrew David Betteley (recorded as June 2026, which may be a filing anomaly or future-dated resignation) and the appointment of Colin George Eric Corbally, who is explicitly listed as an "Investor." This aligns with Frog Capital taking a more active governance role, which should be explored. - Revenue and Profitability Trends: Because these are abridged small-company accounts, the profit and loss account is not visible. Obtaining management accounts is necessary to assess whether the headcount reduction and policy changes are successfully narrowing the operating cash burn.