Credit Analysis: ALTIN HOMES LIMITED

1. Credit Opinion: CONDITIONAL

Rationale: Altin Homes demonstrates a strong equity base and consistent net asset growth over a decade of trading, with significant deleveraging evident in recent years. However, the sharp deterioration in the cash position (from £2.79M in 2018 to £181K at YE2024) and the heavy concentration of value in property stocks (£5.34M, representing 57% of total assets) introduces liquidity risk that requires mitigation. Any credit facility should be structured with appropriate covenants around cash flow and liquidity metrics. The company's established trading history (nearly 20 years) and improving leverage profile are positive counterbalancing factors.

2. Financial Strength

Balance Sheet Summary (YE 2024):

Key Observations:

• Consistent Equity Growth: Net assets have grown every year from £3.12M (2016) to £6.40M (2024), demonstrating sustained profitability and reinvestment into the business.

• Significant Deleveraging: Total liabilities have reduced from a peak of £7.99M (2020) to £2.42M (2024). Long-term creditors now stand at £2.42M versus £7.05M in 2019 – a substantial reduction indicating active debt repayment or restructuring.

• Gearing Ratio: Long-term debt to equity stands at approximately 0.38:1 (£2.42M / £6.40M), which is conservative for a property development company.

• Asset Composition Concern: The balance sheet is heavily weighted toward current assets (£8.83M of £9.42M total), with stocks (property developments in progress) at £5.34M. This is typical for a developer but creates concentration risk – asset realisation depends on the residential property market.

• Share Capital: At £2.60M, this represents substantial paid-in capital, indicating shareholder commitment to the business.

Ten-Year Trajectory: The company has grown net assets from approximately £3.4M to £6.4M over the decade, nearly doubling in size. This is a positive indicator of management's ability to grow the business whilst strengthening the balance sheet.

3. Cash Flow Assessment

Liquidity Position (YE 2024):

Critical Concern – Cash Decline:

The cash position has deteriorated significantly over recent years:

The current cash balance of £181K is alarmingly low relative to the size of the business and its current liabilities. While the current ratio appears healthy at 15.1x, this is heavily dependent on the realisation of stocks (property developments) and collection of debtors (£3.3M).

Working Capital Analysis:

• Stocks: £5.34M – These are likely properties under development or completed but unsold units. In a property downturn, realisation could be slower and at reduced values.

• Debtors: £3.30M – This is a significant figure. Without visibility of the age profile, there is a risk that some debts may be slow-paying or impaired. As a developer, this could include deposits from purchasers or amounts due on completion.

• Current Liabilities: £586K – Relatively modest, but the low cash position means the company has limited headroom if trade creditors accelerate payment demands or if development costs overrun.

Cash Flow Implications: The retained profit increase of £139K (from £3.66M to £3.80M) suggests the company is profitable, but the cash decline indicates either heavy investment in stock, significant capital expenditure, or debt repayment. The reduction in long-term liabilities from £2.40M to £2.42M (minimal change) suggests cash has been deployed into stock rather than debt reduction in this period.

4. Monitoring Points

Additional Considerations:

• Related Party Exposure: The PSC structure shows Mr Mohammad Zibandeh Khoy with >75% share ownership and significant control. Any related-party lending or guarantees should be identified and assessed.

• Seasonal/Cyclical Risk: Property development is inherently cyclical. The company's asset base is heavily property-dependent, making it vulnerable to residential market corrections.

• Director Disqualification Checks: No records identified in the data provided, but full searches should be confirmed as part of due diligence.

• Filing Status: Accounts are up to date (YE 2024 filed, next due September 2027). Confirmation statement current.

• Provisions: £17K provision for liabilities noted – obtain clarity on nature (likely warranty obligations on completed developments).