BROOKMAN PROPERTY LIMITED

Executive Summary

Brookman Property Limited, incorporated in 2023, presents a high-risk profile due to a negative net asset position and severe working capital deficits primarily caused by substantial related party loans. While the company holds significant investment property assets, liquidity and solvency concerns stemming from repayable loans and current liabilities pose challenges. Further due diligence on asset valuations, loan terms, and operational cash flows is recommended to clarify financial sustainability.

BROOKMAN PROPERTY LIMITED - Analysis Report

Company Number: 14850157

Analysis Date: 2025-07-29 18:00 UTC

1. Risk Rating: HIGH
   Justification: The company exhibits a negative net asset position and significant net current liabilities, indicating potential solvency and liquidity challenges. The large amount owed to group undertakings classified as repayable on demand, combined with secured bank loans, heightens the risk profile.

2. Key Concerns:

• Negative Net Assets: The company shows net liabilities of £8,578 as at 31 December 2023, reflecting an equity deficit which is a red flag for financial stability.
• Severe Working Capital Deficit: Net current liabilities amount to approximately £1.94 million, driven primarily by amounts owed to group undertakings (£1.935 million) and other creditors, suggesting liquidity constraints.
• Dependence on Related Party Loans: The substantial loan from related parties, repayable on demand but unlikely to be repaid within the next year, raises concerns about reliance on intra-group funding and the company’s ability to meet short-term obligations independently.

3. Positive Indicators:

• Significant Fixed Assets: The company holds investment property valued at approximately £2.89 million, which provides a tangible asset base that could support refinancing or sale if needed.
• No Overdue Filings: The company is up to date with statutory filing requirements (accounts and confirmation statement), which suggests compliance with regulatory obligations at this stage.
• Going Concern Stated by Directors: The accounts have been prepared on a going concern basis, implying management’s confidence in operational continuity.

4. Due Diligence Notes:

• Valuation of Investment Property: The accounts note no independent valuation was performed; verification of property valuations and marketability is critical to assess asset realizability.
• Terms and Security of Loans: Detailed review of related party loan agreements and bank borrowings including covenants, interest rates, and security arrangements to understand refinancing risks.
• Cash Flow Projections and Business Model: Given the significant current liabilities, analysis of cash flow forecasts, rental income stability, and operational plans to improve liquidity is necessary.
• Related Party Transactions: Scrutinize the nature and terms of transactions with subsidiaries and other related parties, ensuring arm’s length dealings and no contingent liabilities.
• Director Background Checks: Although no disqualifications are recorded, verifying directors’ track records and experience in property management would be prudent.