AFENI HEALTHCARE LIMITED

Executive Summary

Afeni Healthcare Limited shows promising growth with strengthened net assets and positive working capital since incorporation. However, significant intercompany receivables and director advances without fixed repayment terms raise liquidity concerns. Conditional credit approval is advised, with regular monitoring of cash flows and debtor collectability to ensure ongoing creditworthiness.

AFENI HEALTHCARE LIMITED - Analysis Report

Company Number: 13816008

Analysis Date: 2025-07-29 15:17 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Afeni Healthcare Limited demonstrates improving financial strength with growing net assets and positive working capital. However, the company is relatively young (incorporated late 2021) and shows significant intercompany debtor balances owed from related entities under common control, which may pose collection risks. The director’s loan account shows advances without fixed repayment terms, indicating potential liquidity management concerns. Approval is recommended subject to conditions: monitoring intercompany receivables closely, obtaining updated cash flow forecasts, and ensuring timely servicing of bank loans.

2. Financial Strength:
   The latest accounts (period ending 31 March 2024) show net assets of £261k, up substantially from £29.7k in 2022, reflecting business growth and capital retention. Tangible fixed assets are modest (£10k), indicating limited capital expenditure. Current assets at £531k exceed current liabilities of £278k by £253k, yielding healthy net current assets and working capital. The balance sheet is strengthened by share capital of £100 and retained earnings of £261k. However, a large portion of current assets (£475k) are debtors, primarily intercompany (£405k from Afeni Properties Ltd), which could affect liquidity if not collectible on time.

3. Cash Flow Assessment:
   Cash at bank is relatively low (£56k) compared to current liabilities (£278k), suggesting cash flow tightness despite strong net working capital. The director’s loan account shows a balance owed to the company (£38k) but with no fixed repayment terms, reducing immediate cash inflows. The company has an £80k bank loan currently outstanding. Given the increasing scale of operations (average 7 employees in 2023 vs none in 2022), ongoing cash flow management will be crucial to meet short-term obligations and loan repayments.

4. Monitoring Points:

• Intercompany debtor balances and their aging: assess collectability and impact on liquidity.
• Cash flow trends and ability to service bank loans and other creditors.
• Timeliness of future accounts and confirmation statement filings to maintain compliance.
• Director’s loan account movements and any changes in repayment arrangements.
• Profitability and turnover data as it becomes available to further evaluate sustainability.