BROTHERS & BUSINESS INVESTMENT LIMITED

Executive Summary

Brothers & Business Investment Limited has improved from a prior negative net asset position to a modestly positive financial position by 2023, supported by profitable investments in associates. However, negative working capital and limited cash reserves introduce short-term liquidity risk, requiring ongoing monitoring and prudent cash flow management. Conditional credit approval is recommended, contingent on maintaining sufficient liquidity and the continued performance of its investment holdings.

BROTHERS & BUSINESS INVESTMENT LIMITED - Analysis Report

Company Number: 12566464

Analysis Date: 2025-07-20 13:00 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Brothers & Business Investment Limited is an active private limited company functioning as a holding company. The company shows positive net assets and shareholder funds as of the latest accounts (2023), indicating solvency. However, current liabilities exceed current assets, resulting in negative net current assets (working capital deficit), which raises concerns about short-term liquidity. The company’s operational model relies heavily on investments in associated undertakings, which appear profitable, but the repayment of short-term obligations depends on the timing and realization of these investments. The presence of related-party creditors suggests some reliance on shareholder support. Approval is recommended subject to monitoring liquidity closely and ensuring no material deterioration in working capital or creditor pressures.

2. Financial Strength:
   The company’s net assets improved from negative in 2020 to positive £5,066 (approx. €5,800) in 2023. This improvement reflects capital injections and profitable operations through its associates. Fixed asset investments decreased substantially from €133,442 in 2022 to €11,502 in 2023 due to repayments and interest received, indicating partial realization of investments. Shareholders’ funds remain modest but positive. The balance sheet shows a consistent pattern of current liabilities exceeding current assets, with a net current liability of £6,436 in 2023 (improving from a larger deficit previously). Overall, the company’s balance sheet shows moderate financial strength supported by its holdings but limited liquidity buffer.

3. Cash Flow Assessment:
   Cash at bank stands at £8,746, which is low relative to short-term liabilities of £15,182. The negative working capital suggests the company may face short-term cash flow pressures. However, the company has demonstrated the ability to repay related-party creditors significantly (reduction from €76,295 in 2022 to €3,795 in 2023), showing some cash flow management. The reliance on repayments and dividends from associate companies is critical to its liquidity. No bank borrowings are evident, indicating no external debt servicing burden. Enhanced cash flow forecasting and working capital management are essential to mitigate liquidity risk.

4. Monitoring Points:

• Working capital dynamics and short-term liquidity, focusing on the ability to meet current liabilities as they fall due.
• Timely realization and value of investments in associates, which underpin financial strength.
• Related-party creditor balances and their changes, as these may signal cash flow dependency on shareholders.
• Profitability and dividend distributions from investees to support cash inflows.
• Changes in directors or corporate governance that could impact business stability.