A & R PROPERTIES AND INVESTMENTS LTD

Executive Summary

A & R Properties and Investments Ltd demonstrates modest financial growth with increasing net assets and property value appreciation. However, the company’s liquidity position is weak with negative working capital and significant secured debt, posing short-term repayment risks. Conditional credit approval is recommended with close monitoring of cash flow and debt servicing capabilities.

A & R PROPERTIES AND INVESTMENTS LTD - Analysis Report

Company Number: 14123860

Analysis Date: 2025-07-29 12:19 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   A & R Properties and Investments Ltd is a recently incorporated private limited company specializing in real estate investment and letting. The company shows positive net assets and a modest profit in its latest financial year, supported by a revaluation uplift in investment property. However, the company has significant current liabilities exceeding current assets, resulting in negative net working capital, and carries a sizeable secured loan. Credit approval may be considered with conditions such as ongoing monitoring of cash flow and debt servicing, and potential requirement for additional security or guarantees given the liquidity constraints.

2. Financial Strength:
   The company’s balance sheet shows total assets of approximately £493k (mainly investment property at £475k plus cash), with creditors due within one year at £176k and long-term bank loans of £293k secured against the property. Net assets increased from £724 to £20,786 year-on-year, reflecting retained earnings and a fair value reserve uplift. Despite this growth, the negative net current assets of around £158k indicates short-term liquidity pressure. The gearing ratio is high given the debt secured against investment property but common in property investment firms.

3. Cash Flow Assessment:
   Cash balances improved from £9,161 to £18,563 but remain low relative to short-term liabilities. The negative working capital of £158,070 suggests the company may face challenges meeting immediate obligations without relying on refinancing or additional capital. The presence of director loans amounting to £173,008 may provide some informal liquidity support, but this is not guaranteed. Cash flow from operations is not disclosed but profitability and fair value gains imply potential to generate cash, though timing and consistency are uncertain.

4. Monitoring Points:

• Liquidity and working capital trends to ensure current liabilities can be met as they fall due.
• Servicing of bank loan and adherence to repayment schedules, given the secured nature of debt.
• Property market conditions affecting valuation and fair value reserve.
• Director loan repayments or conversion to equity to strengthen the balance sheet.
• Profitability sustainability beyond one year and cash flow generation from rental income.
• Timely filing of accounts and confirmation statements (currently up to date).