Company Number: 13788312

Analysis Date: 2025-07-20 17:06 UTC

1. Credit Opinion: DECLINE
   Breakspear Homes Limited exhibits significant financial distress indicators. Despite owning investment properties valued at £750,000, the company’s net liabilities are £22,512 as of 31 March 2024. Current liabilities substantially exceed current assets, with a negative working capital of £201,260. The company is highly leveraged, with bank loans of £571,252 secured on the properties, and minimal liquid assets (£1,440 cash). The negative shareholders’ funds and consistent losses reflected in the income statement reserve suggest an inability to service debt or repay credit facilities without external support or restructuring. The director’s loan account of nearly £200,000 indicates reliance on director funding, which may not be sustainable. Given these factors, approval for additional credit facilities would be imprudent without significant improvement or guarantees.

2. Financial Strength
   The balance sheet is weak. Fixed assets consist solely of investment properties valued at £750,000, which appear stable year-on-year. However, current assets are negligible and insufficient to cover current liabilities of over £571,000. The company’s net liabilities position and negative equity indicate erosion of capital, raising concerns about solvency. The bank loans are interest-only and repayable in full at term end, which postpones principal repayment but exposes the company to refinancing risk. The director’s loan is a positive sign of management support but also a concentration risk. Overall, the financial structure is highly leveraged with minimal buffer for adverse events.

3. Cash Flow Assessment
   Liquidity is extremely constrained. Cash at bank is only £1,440, insufficient to meet short-term obligations of £202,700. Negative net current assets indicate a working capital deficit, signaling potential difficulty in meeting day-to-day expenses. The company’s turnover is from rental income, but no detailed cash flow statement is provided to assess operational cash generation. Given the large interest-only loan balances, the company likely faces significant interest expenses, further straining cash flows. The reliance on director loans suggests external financing sources are limited or not forthcoming.

4. Monitoring Points

• Monitor changes in rental income and occupancy rates to assess revenue stability.
• Watch for improvements in working capital and cash reserves.
• Track any restructuring or refinancing of bank loans to reduce leverage.
• Observe any director loan advances or repayments indicating management support.
• Review annual filings for continued negative equity or worsening liquidity.
• Assess any changes in property valuations that could impact asset backing.