BARE DIRECT LTD

Executive Summary

BARE DIRECT LTD demonstrates improving liquidity and net asset position after initial losses, supported by a strong parent company guarantee. However, operating losses and negative retained earnings warrant caution. Conditional credit approval is recommended with ongoing monitoring of financial performance and parent support commitment.

BARE DIRECT LTD - Analysis Report

Company Number: 13342674

Analysis Date: 2025-07-29 20:31 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Bare Direct Ltd is an active private limited company incorporated in 2021, operating in a niche service sector (SIC 96090). The company has shown a recovery in net assets from a negative position in 2020 to positive £51,380 in 2023. However, the shareholders’ funds have deteriorated from £184,019 in 2021 to a negative retained earnings reserve of approximately -£194,389 in 2023. The company is currently operating at a loss but benefits from a strong parent company support letter confirming backing for repayment obligations. Given the short trading history, modest asset base, and losses, lending decisions should be conditional on continued parent support and regular financial updates.

2. Financial Strength:

• The balance sheet shows current assets of £53,957 (including £16,137 cash) against current liabilities of £2,577, yielding net current assets of £51,380, indicating a healthy short-term liquidity position.
• Total net assets stand at £51,380, reflecting a small equity base relative to operational scale.
• The share capital is £61,750, fully paid, but the negative retained earnings suggest accumulated losses impacting shareholders' funds.
• The company carries no long-term liabilities disclosed, which limits leverage risk but also indicates reliance on equity and parent company support.

3. Cash Flow Assessment:

• Cash balances have declined from £19,639 in 2022 to £16,137 in 2023, suggesting moderate cash consumption or investment.
• Current liabilities have reduced significantly from £7,100 in 2022 to £2,577 in 2023, improving working capital.
• Stocks (work in progress) have decreased to £37,820 from £52,577 in 2022, which may positively affect cash conversion cycles.
• No employees are reported, which may indicate low overheads but also limited operational scale.
• The absence of dividend payments aligns with conserving cash to support operational needs.

4. Monitoring Points:

• Close monitoring of profitability trends and cash flow statements to detect ongoing operational losses and cash burn rate.
• Regular review of parent company support and any changes in group structure or financial health that could impact backing.
• Watch for increases in liabilities or deterioration in working capital metrics.
• Track stock levels and turnover efficiency to ensure inventory is not becoming obsolete or tying up excessive capital.
• Review any changes in directors or management practices that could influence financial stewardship.