ADDIS & WHITEMAN LIMITED

Executive Summary

Addis & Whiteman Limited is a property-backed company with stable net assets but weak liquidity and negative working capital. The company depends heavily on directors’ loans and has substantial long-term debt, which presents short-term repayment risks. Conditional credit approval is recommended, subject to monitoring of liquidity, director support, and property valuation to mitigate financial risk.

ADDIS & WHITEMAN LIMITED - Analysis Report

Company Number: 12837967

Analysis Date: 2025-07-19 12:25 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Addis & Whiteman Limited is an active private limited company specializing in the letting and operation of its own real estate. The company holds a significant freehold property asset valued at £230,000, supported by a revaluation reserve reflecting appreciation. However, the company has persistent net current liabilities (negative working capital of around £3,185 in 2024) and substantial long-term debt of £166,819, predominantly comprising bank and directors’ loans. These factors raise some concerns regarding short-term liquidity and dependency on related-party funding. The directors appear committed, with no adverse governance flags, but the company’s ability to meet short-term obligations without additional liquidity support is limited. Approval can be considered if the bank is comfortable with the collateral value of the property and the directors’ ongoing support, and if loan covenants or credit terms reflect the company’s working capital constraints.

2. Financial Strength:
   The balance sheet is strongly asset-backed, primarily by the freehold property recorded at £230,000, which has been revalued and shows a stable valuation. Net assets stand at £49,367, indicating some equity cushion, though modest. Share capital is minimal at £380, reflecting a closely held ownership structure. The company shows consistent net asset values over recent years, but the significant long-term liabilities (£166,819) and provisions reduce free equity. The revaluation reserve of £45,314 strengthens the equity position but is a non-cash reserve. No depreciation is charged on the property, consistent with accounting policy for freehold land and buildings. Overall, the company has solid fixed assets but is leveraged, with equity representing about 30% of total liabilities and reserves.

3. Cash Flow Assessment:
   Current assets are minimal (£56 in debtors), with current liabilities at £3,241, resulting in negative net current assets and a working capital deficit. The company employs no staff and does not appear to generate turnover or liquid current assets sufficient to cover short-term liabilities. The directors’ loans are sizeable and partly repayable after one year, but these balances are not expected to be repaid within the next 12 months, reflecting financing reliance on directors. The absence of depreciation expense helps profitability but does not impact cash. The company’s liquidity position is weak and reliant on directors' financial support or property income, which is not detailed here. The lack of turnover data limits assessment of operational cash flow generation, indicating potential vulnerability if property income or director funding diminishes.

4. Monitoring Points:

• Working capital trends and whether negative net current assets persist or worsen
• Directors’ loan balances and any changes in repayment expectations or terms
• Property valuation updates and potential impairment risks
• Evidence of rental income or other revenue streams to support debt servicing
• Timely filing of accounts and confirmation statements to ensure ongoing compliance
• Any changes in company ownership or director status that might affect governance or financial strategy