2 BELLE VUE APARTMENTS LTD

Executive Summary

2 Belle Vue Apartments Ltd exhibits improving asset values but remains exposed to liquidity pressure and high leverage risks, primarily due to significant bank borrowings and negative net current assets. The company complies with regulatory filing requirements and benefits from a clear ownership structure. However, further due diligence is advisable on loan covenants, cash flow management, and intercompany balances to fully assess financial resilience.

2 BELLE VUE APARTMENTS LTD - Analysis Report

Company Number: 13990805

Analysis Date: 2025-07-29 17:24 UTC

1. Risk Rating: MEDIUM
   The company shows an improving asset base and net asset position but continues to have significant liabilities, particularly in the form of long-term bank loans. Negative net current assets indicate potential short-term liquidity challenges, warranting a medium risk rating.

2. Key Concerns:

• Liquidity Pressure: The company has net current liabilities of approximately £138,698 at the 2024 year-end, indicating that current liabilities exceed current assets, which may cause short-term cash flow difficulties.
• High Leverage: Substantial long-term bank loans (£408,212) relative to shareholders’ funds (£16,606) suggest high financial gearing, increasing solvency risk if the property value or income streams decline.
• Reliance on Group Support: Debtors and creditors include significant amounts owed to and from group undertakings. This intercompany reliance could mask liquidity or operational issues if group support is withdrawn.

3. Positive Indicators:

• Asset Growth and Revaluation Gains: Investment property increased in value from £516,064 to £565,000, reflecting positive revaluation gains (£5,936) and additions (£43,000), which supports underlying asset strength.
• No Overdue Filings: Accounts and confirmation statements are up to date, demonstrating regulatory compliance and good governance in filing obligations.
• Ownership and Control: Clear ownership by Bodenspaces Limited with a single director (Mark Christopher Boden) suggests straightforward governance without complex shareholding structures.

4. Due Diligence Notes:

• Review the terms and covenants on bank loans to assess refinancing risk and potential breaches that could accelerate liabilities.
• Examine cash flow forecasts and group support arrangements to understand how liquidity shortfalls are managed given negative working capital.
• Verify the valuation methodology and assumptions used for investment property fair value to confirm asset quality and realizable value.
• Assess intercompany balances for collectability and payment terms, as significant related-party transactions may impact financial stability.
• Consider director background checks and any related party transactions given the sole director structure and group ownership.