Company Number: 13286755

Analysis Date: 2025-07-20 13:49 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Adams & Moore Capital Ltd presents a stable asset base with significant investment property holdings valued at £2.795m, which forms the backbone of the company's balance sheet. However, the company carries substantial long-term liabilities (£2.57m), split between a bank loan and a director's loan, which pose a notable repayment risk. The director's loan is interest-free and repayable on demand, which could reduce immediate cash flow pressure but also introduces potential volatility in funding. The company’s modest net asset base (£238k) and limited cash reserves (£10k) constrain liquidity, requiring close monitoring. Approval is recommended with conditions focused on ongoing liquidity management and confirmation of sustainable rental income streams.

2. Financial Strength:
   The balance sheet shows a strong fixed asset base with no depreciation applied to investment properties, reflecting their market value. Net assets have improved modestly from £184k in 2021 to £239k in 2024, indicating some retained earnings growth. However, current assets remain low relative to current liabilities, though current liabilities are minimal (£712) compared to the large long-term debt. The large bank and director loans underpin the company's capital structure but increase financial leverage to a high level. The company qualifies as a small entity and has complied with filing and reporting requirements timely, showing reasonable financial stewardship.

3. Cash Flow Assessment:
   Cash at bank is limited (£10k), and debtors (£77k) are relatively small, indicating limited working capital. The company’s net current assets (£87k) are positive but small relative to total liabilities. The business relies heavily on rental income from investment properties for cash flow, which is not detailed but implied in the income recognition policy. There is no audit requirement, and profit and loss details are not filed, limiting insight into operational cash generation. The director’s loan being interest-free and repayable on demand offers some flexibility in managing short-term liquidity but also adds uncertainty. Overall, cash flow appears constrained, and liquidity risk exists if rental income fluctuates or debt repayments accelerate.

4. Monitoring Points:

• Rental income consistency and tenant occupancy rates for investment properties to ensure steady cash flow.
• Servicing and refinancing plans for long-term bank loan and director’s loan, especially since the director’s loan is repayable on demand.
• Changes in fair market value of investment properties, given their substantial proportion of total assets.
• Cash flow forecasts and working capital trends to detect any tightening liquidity early.
• Timely filing of accounts and returns to maintain transparency and regulatory compliance.