BAKER WOUTERS PROPERTY HOLDINGS LIMITED

Executive Summary

Baker Wouters Property Holdings Limited is financially fragile, exhibiting negative equity and poor liquidity, with current liabilities exceeding liquid assets substantially. The company’s over-leveraged position and stagnant fixed assets limit its capacity to service debt or absorb financial shocks. Given these risks, credit approval is not recommended without significant mitigation or turnaround evidence.

BAKER WOUTERS PROPERTY HOLDINGS LIMITED - Analysis Report

Company Number: SC704593

Analysis Date: 2025-07-20 16:00 UTC

1. Credit Opinion: DECLINE
   Baker Wouters Property Holdings Limited presents significant credit risk primarily due to negative net assets and poor liquidity. The company has persistent net liabilities (around -£42,000) and negative working capital exceeding £57,000, indicating an inability to cover short-term liabilities with current assets. Furthermore, the company’s fixed assets are modest (£123k) and primarily property-related, offering limited liquidity. The level of bank loans (£106k) relative to the equity base and cash resources suggests over-leverage. Absence of profitability data signals ongoing losses, and no audit has been performed to verify financial accuracy. The lack of improvement over multiple years and a negative equity position undermine confidence in its capacity to meet debt obligations.

2. Financial Strength:
   The balance sheet shows a heavily leveraged structure with bank loans of £106,641 and directors’ loans totaling about £58,488 due within a year. Current liabilities exceed current assets substantially, resulting in negative net current assets (_{-£58k). Negative shareholders’ funds (}-£42k) reflect accumulated losses. Fixed assets remain static at £122,653, suggesting no recent reinvestment or asset growth. This financial position signals weak capitalisation and poor buffer against adverse market conditions.

3. Cash Flow Assessment:
   The reported cash balance is minimal (£613), insufficient to cover short-term creditors of approximately £58,570. Negative working capital and reliance on directors’ loans and bank financing highlight liquidity stress and potential cash flow constraints. The company’s ability to generate positive operating cash flow is unclear, but ongoing negative equity and stagnant asset base imply limited internal cash generation. Short-term liquidity risk is elevated, increasing the likelihood of payment delays or default.

4. Monitoring Points:

• Improvement in net current assets and working capital management.
• Reduction in reliance on directors’ loans and bank debt levels.
• Progress towards achieving positive net assets and profitability.
• Timely filing of accounts and confirmation statements to monitor ongoing compliance.
• Any material changes in property asset valuations or new financing arrangements.
• Directors’ ability to inject further equity or restructure liabilities if needed.