BACKUP PROPERTIES LIMITED

Executive Summary

Backup Properties Limited is showing early signs of recovery with improved net assets and near break-even trading but remains financially fragile with limited liquidity and low tangible asset backing. Credit can be conditionally approved with ongoing close monitoring of cash flow and working capital management to ensure sustained repayment capacity. The director’s professional background supports governance, though the company must demonstrate consistent positive performance to mitigate credit risk.

BACKUP PROPERTIES LIMITED - Analysis Report

Company Number: 13958374

Analysis Date: 2025-07-29 16:40 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Backup Properties Limited shows initial signs of financial recovery with a marginal improvement in net assets from a significant deficit. However, the company remains in a fragile position with minimal profitability and limited fixed assets. The director’s background as an accountant is a positive for governance, but the company’s ability to service debt is constrained by low cash balances and current liabilities. Extension of credit should be conditional on updated cash flow forecasts, tighter working capital controls, and evidence of consistent positive trading.

2. Financial Strength:

• The net assets improved from a negative £8,225 in 2023 to a positive £914 in 2024, indicating some strengthening of the balance sheet, mainly through reduction of long-term creditors (from £15,000 to £5,092).
• Fixed assets are minimal (£1,429), reflecting limited tangible collateral value.
• Shareholders’ funds are low (£1,000 capital with accumulated losses almost wiped out to a small deficit).
• Overall, the financial structure is weak but trending positively.

3. Cash Flow Assessment:

• Cash at bank decreased significantly from £3,495 to £1,077, indicating tightening liquidity.
• Current liabilities (£3,200) exceed current assets (£1,077) on a strict basis, but inclusion of prepayments (£6,700) improves net current assets to £4,577, suggesting working capital is being managed partly through non-cash items.
• Operating loss is minimal (-£86), showing near break-even performance but no cash buffer for unexpected expenses.
• The company’s ability to meet short-term obligations depends heavily on managing receivables/prepayments and controlling payables.

4. Monitoring Points:

• Track cash balances monthly to ensure liquidity does not deteriorate further.
• Monitor the reduction of long-term creditors and any new borrowing.
• Review profitability trends in subsequent periods to confirm movement to sustainable earnings.
• Assess director’s management of working capital, especially prepayments and creditor days.
• Watch for any changes in company status or director conduct that could affect creditworthiness.