ARABELLA PROPERTY PORTFOLIO 1 LTD

Executive Summary

Arabella Property Portfolio 1 Ltd faces significant liquidity and solvency challenges, highlighted by zero cash and substantial short-term liabilities exceeding current assets. While the company holds valuable investment property and maintains regulatory compliance, the ongoing negative working capital and reliance on secured loans raise concerns about its ability to meet obligations without additional funding or asset sales. Further detailed cash flow and loan covenant analysis is recommended to fully understand the financial stability and operational sustainability.

ARABELLA PROPERTY PORTFOLIO 1 LTD - Analysis Report

Company Number: 12908327

Analysis Date: 2025-07-29 18:36 UTC

1. Risk Rating: HIGH
   Justification: The company exhibits significant liquidity risk, with no cash reported as of the latest year-end and current liabilities substantially exceeding current assets, resulting in negative net current assets of approximately £681k. Although it holds investment property valued at around £693k, the working capital deficiency and negligible cash position raise concerns about its ability to meet short-term obligations.

2. Key Concerns:

• Liquidity Shortfall: Zero cash balance coupled with current liabilities exceeding £680k indicates potential difficulty in meeting immediate financial obligations.
• Negative Working Capital: Persistent negative net current assets over multiple reporting periods suggest ongoing liquidity strain.
• Reliance on Secured Loans: The company’s loans are secured against assets, which may limit financial flexibility and increase risk if asset values decline or cash flow issues persist.

3. Positive Indicators:

• Stable Investment Property Valuation: The company’s main asset, investment property, maintains a consistent fair value of approximately £693k, providing underlying asset support.
• Compliance with Filing Requirements: Accounts and confirmation statements are up to date with no overdue filings, indicating regulatory compliance and reasonable governance.
• No Employees: The absence of employees reduces operational overhead and related risks.

4. Due Diligence Notes:

• Investigate the nature and terms of the secured loans, including repayment schedules and covenants, to assess refinancing or default risks.
• Examine cash flow projections and revenue streams from the letting of the investment property to evaluate operational sustainability.
• Confirm whether the negative working capital is a temporary timing issue or indicative of chronic financial distress.
• Review any related party transactions or contingent liabilities not evident in the accounts.
• Assess the director’s strategy for addressing liquidity challenges given the company’s negative net current assets and zero cash.