Company Number: 13131527

Analysis Date: 2025-07-20 13:04 UTC

1. Credit Opinion:
   DECLINE. Ammonite Tap Limited exhibits significant financial distress with a negative net asset position and net current liabilities as of the latest accounts. The company’s total liabilities exceed its assets, indicating insolvency on a going-concern basis. The large bank loan secured on property, combined with high current liabilities, suggests considerable repayment risk. Absence of trade debtors and minimal cash indicate weak liquidity and operational cash flow challenges. Without evidence of improving profitability or external support, the ability to meet debt obligations is doubtful.

2. Financial Strength:
   The balance sheet as of 31 March 2025 shows total current assets of approximately £1.09 million, predominantly in stock, but current liabilities stand at £1.09 million as well, resulting in a negative net current asset position of £5,392. The company has a tangible fixed asset (fixtures and fittings) net book value of £945. Shareholders’ funds are negative at £4,449, reflecting accumulated losses. The secured bank loan of £638,957 is significant relative to the asset base, and amounts owed to associates of £454,209 further increase leverage. The company’s financial structure is weak with no equity cushion to absorb losses.

3. Cash Flow Assessment:
   Cash on hand is minimal at £1,334, and there are no reported debtors, which implies limited incoming cash flow from operations or receivables. The reliance on stock as the primary current asset may not translate to liquidity if the stock is not readily saleable or valued at cost rather than net realisable value. The high level of short-term liabilities, including the secured bank loan due within one year, creates immediate liquidity pressure. The absence of employees suggests limited operational activity, possibly pointing to a holding or investment entity rather than an active trading business.

4. Monitoring Points:

• Track changes in net current assets and shareholders’ funds to monitor any improvement or further deterioration in capital structure.
• Monitor cash balances and working capital cycle closely, particularly the ability to convert stock into cash.
• Watch for any restructuring of debt or new financing arrangements that could alleviate short-term liquidity constraints.
• Review future annual accounts for profitability metrics and cash flow from operating activities.
• Be alert to any director or stakeholder actions regarding additional capital injections or sale of assets.