BORDER GROUP LIMITED

Executive Summary

Border Group Limited shows improving net asset value and a solid fixed asset base but continues to face significant working capital deficits. Liquidity is supported by related party and director loans, which currently alleviate short-term pressures. Conditional approval is recommended with careful monitoring of liquidity, debtor management, and related party loan terms to ensure ongoing creditworthiness.

BORDER GROUP LIMITED - Analysis Report

Company Number: 12941516

Analysis Date: 2025-07-20 16:25 UTC

1. Credit Opinion: APPROVE with caution. Border Group Limited is an active private limited company operating in the niche sector of renting and leasing construction and civil engineering equipment. The company has demonstrated growth in net assets from £32k in 2022 to £428k in 2023, indicating improving financial strength. However, it has persistently significant net current liabilities (working capital deficits of £2.08m in 2023 and £2.51m in 2022), which poses liquidity risks. The directors have confirmed that a substantial loan from a related party is not expected to be called in imminently, mitigating short-term liquidity concerns. The absence of audit and the reliance on related party financing require close monitoring but do not preclude approval for credit, especially if facilities are structured with covenants and monitoring.

2. Financial Strength: The company’s balance sheet shows total fixed assets of approximately £2.75m and net assets of £428k at the end of 2023, up substantially from £32k in 2022. This growth reflects retained earnings accumulation (£427,881) and stable fixed asset base. The capital structure includes a nominal share capital of £100. However, the company carries substantial current liabilities (£3.3m), exceeding current assets (£1.21m), leading to a working capital deficit of over £2m. Non-current liabilities represent hire purchase contracts of £130k and provisions of £113k, which are manageable relative to net assets. The company’s financial strength is moderate, supported by tangible assets and equity growth but weakened by short-term liability pressures.

3. Cash Flow Assessment: Cash at bank increased from £197k to £263k year-on-year, showing modest improvement in liquidity. Debtors nearly doubled from £399k to £845k, indicating either growth in sales or possible delays in collections, which could impact cash flow. The large balance of other creditors (approximately £3m, including a loan from a related company with no formal agreement) provides short-term funding but represents a risk if repayment terms change. The directors’ loan account receivable of £834k (interest-free, repayable on demand) from directors partially offsets liquidity risk but is unsecured and dependent on directors’ financial standing. Overall, the company has liquidity challenges due to working capital pressure but mitigates this by related party loans and director support.

4. Monitoring Points:

• Monitor ongoing liquidity and working capital, focusing on debtor collection periods and creditor terms.
• Review any changes in related party loan terms, especially whether calls for repayment could impact cash flow.
• Track profitability through future filed accounts (income statements were not filed) to ensure earnings support debt servicing.
• Observe any changes in hire purchase or lease obligations that could increase financial burden.
• Keep watch on director conduct and company filings to detect any governance or compliance issues.