Company Number: 13616156

Analysis Date: 2025-07-29 18:46 UTC

1. Credit Opinion: DECLINE
   ANVILMAR LIMITED shows a significant negative net asset position that has deteriorated over the last three years (£-167k in 2024 vs. £-88k in 2023). The company's current liabilities have increased substantially to over £3.2 million, vastly exceeding current assets of only £32.5k, resulting in a large negative working capital position (net current assets of £-3.24 million). This indicates serious liquidity stress and an inability to meet short-term obligations from current resources. The company also operates with very limited equity (share capital of only £100) and persistent losses reflected in a growing deficit in profit and loss reserves. Despite owning tangible fixed assets valued above £3 million (land and buildings), the lack of depreciation suggests these assets may not be readily liquid or valued conservatively. Given the high current liabilities and negative equity, the risk of default is elevated, and the company’s ability to generate sufficient cash flow to service debt or new credit facilities is doubtful without significant restructuring or capital injection. Therefore, credit approval is not recommended at this stage.

2. Financial Strength:
   The balance sheet reveals a weak financial structure with shareholders' funds deeply negative at £-167k. While the company owns tangible fixed assets of approximately £3.08 million, these are offset by creditors exceeding £3.27 million due within one year. The absence of depreciation on fixed assets may imply either land holdings or possible overstatement of asset values. The continual increase in current liabilities from £1.04 million in 2021 to £3.27 million in 2024 without corresponding growth in current assets or equity undermines financial stability. The company is highly leveraged with poor capital adequacy and a worsening net asset position.

3. Cash Flow Assessment:
   Cash resources are minimal (£20.5k) compared to short-term liabilities (£3.27 million), evidencing inadequate liquidity. Working capital is severely negative, indicating the company cannot cover immediate debts from current assets. Debtors are low and modest (£12k), and there is no indication of significant cash inflows to mitigate liquidity constraints. Without robust operating cash flows or external financing, the company faces challenges in meeting payment obligations, suggesting a high risk of cash flow insolvency.

4. Monitoring Points:

• Current liabilities level and any changes in creditor composition and payment terms.
• Cash balances and liquidity position on a monthly basis.
• Changes in tangible fixed asset valuations or disposals that could impact asset backing.
• Any capital injections or shareholder funding to improve equity and working capital.
• Profit and loss account developments to assess if losses are continuing or reversing.
• Director and related party transactions, especially given the large creditor balances, to identify potential related party risks.