A&A PROPERTY LETTINGS LIMITED

Executive Summary

A&A Property Lettings Limited demonstrates weak financial health marked by negative net assets, poor liquidity, and heavy reliance on debt financing with limited cash resources. The company lacks operational cash flow and equity buffer, posing high credit risk. Approval for new credit facilities is not recommended without significant financial improvement or additional security.

A&A PROPERTY LETTINGS LIMITED - Analysis Report

Company Number: 12495327

Analysis Date: 2025-07-20 17:37 UTC

1. Credit Opinion: DECLINE
   A&A Property Lettings Limited shows persistent negative net assets and shareholders' funds, indicating an erosion of equity and financial weakness. The company’s working capital position is negative and worsening, with net current liabilities increasing from £15,178 to £19,210. Cash balances remain low relative to current liabilities, limiting liquidity. The company relies heavily on director loans and bank debt, suggesting limited external funding capacity. Without evidence of profitability or positive cash flow generation, the ability to service debt and meet obligations is doubtful.

2. Financial Strength:
   The company’s balance sheet reveals a fixed asset (investment property) valued consistently at £60,000, but total liabilities (primarily bank loans of £44,980 and director loans increasing to £24,622) outweigh assets leading to net liabilities of £4,190 as of 31 March 2024. Share capital is negligible (£2), and accumulated losses have deepened from £160 to £4,192. No equity cushion exists, and reliance on external borrowings undermines solvency. The absence of employees indicates a minimal operational structure which may constrain growth and resilience.

3. Cash Flow Assessment:
   Cash on hand increased marginally from £2,001 to £5,412, but remains insufficient against current liabilities of nearly £45,000. The company exhibits a negative working capital position, with current liabilities exceeding current assets by a significant margin, limiting operational liquidity. The increasing director loans within creditors suggest reliance on personal funding to sustain operations, which is not a sustainable cash flow source. No evidence of operational cash inflow or profitability is present to support debt servicing.

4. Monitoring Points:

• Improvement in net current assets and reduction of director loans
• Generation of positive operating cash flows and profitability to restore equity
• Timely repayment or restructuring of bank loans to avoid default risk
• Any changes in investment property valuation impacting asset base
• Directors’ commitment to inject further capital or restructure finances