WEAVERS GALLERY LIMITED

Risk Rating: HIGH
The company exhibits persistent negative working capital and a long-term erosion of shareholders’ funds, despite a recent recovery in net assets. While current on filings, the balance sheet structure raises material solvency and liquidity concerns.

Key Concerns

1. Chronic Negative Working Capital
   Current liabilities (£117,873) exceed current assets (£36,334) by a factor of 3.2x, resulting in net current liabilities of -£81,539. This indicates the company may struggle to meet short-term obligations without refinancing or asset sales.

2. Long-Term Erosion of Shareholders’ Funds
   Net assets have declined from £301,572 (2016) to £53,799 (2025), with a near-depletion to £444 in 2023. Although 2024–2025 saw improvement, the overall trend signals sustained value destruction.

3. Reliance on Debt and Uncertain Liability Composition
   Total creditors (current + long-term) stand at £138,887 versus total assets of £192,686. Without a breakdown of trade payables, director loans, or bank debt, the risk of a credit event or forced restructuring is elevated.

Positive Indicators

• Recent Profitability Recovery
  Net assets increased from £444 (2023) to £53,799 (2025), implying retained profits in the last two years. This may indicate a turnaround in trading performance.

• Compliance and Longevity
  The company is active, with no overdue filings, a 24-year trading history, and no director disqualifications on record. All three PSCs hold 25–50% stakes, suggesting aligned interests.

• Fixed Asset Base
  Fixed assets of £156,352 (likely property or equipment) provide a buffer against insolvency, though they are not liquid.

Due Diligence Notes

• Composition of Current Liabilities – Determine whether the £117,873 includes director loans or soft debt. If largely trade creditors, supplier pressure may intensify. If director loans, flexibility is higher.
• Profitability and Cash Flow – Micro-entity accounts do not disclose profit & loss or cash flow. Request management accounts to assess operating margin, EBITDA, and cash conversion.
• Long-Term Creditors (£21,014) – Clarify repayment terms, interest rates, and whether this is a formal loan or director financing.
• Registered Office Change – The latest accounts show a Bristol BS35 address; the current record shows BS9 1AY. Verify the reason for the change and any associated risk (e.g., relocation, cost cutting).
• Director Conduct – No disqualifications appear, but a full background check on Xxxxxx Xxxxxxxxname shown to subscribers and Xxxxxx Xxxxxxxxname shown to subscribers is advisable given the financial volatility.

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