Company Number: 14061541

Analysis Date: 2025-07-29 16:30 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   ABACUS CREATIVE RESOURCES LTD demonstrates rapid growth from inception in 2022 to year-end 2024, with a strong increase in net assets and working capital. The company benefits from a well-capitalized parent (Creative Blue Holdings Ltd) controlling 75-100% of shares and providing related party loans at commercial rates. However, the company carries significant creditor balances within one year (£719k) and beyond one year (£208k), mostly related party loans, which pose some dependency risk. The lack of audited accounts and limited trading history means credit facilities should be provided with conditions: ongoing monitoring of cash flow and debt servicing, and confirmation of profitability once profit and loss accounts become available.

2. Financial Strength:

• Net assets have grown from £89 in 2023 to £380k in 2024, showing strong equity build-up.
• Fixed assets total £162k, consisting of tangible (£86k) and intangible assets (£76k) mainly goodwill and software, indicating some investment in business infrastructure.
• Current assets of £1.17M (with £422k cash) exceed current liabilities of £720k, producing net current assets (working capital) of £446k, suggesting good short-term liquidity.
• Long-term liabilities include £208k of creditor loans owed after one year, reflecting external financing but no bank borrowings.
• Shareholders’ funds are solely equity with no external bank debt, which reduces financial leverage risk.

3. Cash Flow Assessment:

• Cash of £422k at year-end 2024 is robust relative to current liabilities, indicating liquidity to cover short-term obligations.
• Debtors of £178k show reasonable receivables, but reliance on timely collection should be monitored.
• Stock valued at £566k is significant; this inventory level should be managed carefully to avoid obsolescence or cash flow strain.
• The company’s working capital position is healthy, but given the large creditor balances primarily from related parties, actual cash flow dynamics depend on intercompany arrangements and repayment terms.
• No bank debt reduces liquidity pressure from external lenders, but related party loan servicing and interest payments require scrutiny.

4. Monitoring Points:

• Profitability and cash flow from operations once full profit and loss data is filed; currently, profit and loss statements are not included.
• Debtor collection periods and stock turnover rates to ensure working capital efficiency.
• Related party loan terms, including interest payments and repayment schedules, to assess financial risk concentration.
• Director and management stability, noting a new director appointment in April 2025, to confirm continuity of governance.
• Timely filing of next accounts and confirmation statements to maintain compliance and transparency.