BTF DEVELOPMENTS LTD

Executive Summary

BTF Developments Ltd demonstrates improving financial strength with increased net assets and positive working capital. However, liquidity is constrained by reliance on director loans and reduced cash balances. Conditional credit approval is recommended with close monitoring of cash flow, stock management, and director loan account exposure to mitigate risk.

BTF DEVELOPMENTS LTD - Analysis Report

Company Number: 14073221

Analysis Date: 2025-07-29 20:03 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   BTF Developments Ltd is a recently incorporated private limited company operating in the construction and development sector. The company shows a positive net asset position and improved shareholders' funds over the last year, indicating some growth. However, there is a significant reliance on director loan accounts as part of current liabilities, which represents an internal funding mechanism that could affect liquidity if not managed carefully. Given the company's young age, modest fixed assets, and construction sector exposure, approval is recommended with conditions on monitoring liquidity and cash flow closely, especially regarding the repayment or restructuring of director loans.

2. Financial Strength:
   The balance sheet as of April 30, 2024, shows net assets of £211,497, up from £122,777 the previous year, reflecting retained earnings growth and improved equity. Fixed assets are modest at £38,333, consistent with the company’s size and sector. Current assets have decreased from £1.2m to £723k, largely due to reduced stock and cash balances. Current liabilities halved from £1.1m to £540k, positively impacting net current assets, which improved to £182,747. The company holds deferred tax provisions (£9,583), indicating planned tax liabilities. Overall, the company’s financial position is stable but relatively thin, with equity providing a buffer.

3. Cash Flow Assessment:
   Cash at bank decreased to £227,137 from £312,533, signaling tighter liquidity. Debtors are low at £5,818, reducing risk of receivables collection delays. Stock levels have declined significantly to £490,299 from £860,865, potentially improving working capital turnover but also possibly reflecting slower sales or project completion. Current liabilities are largely driven by director loan accounts (£496,241), which is a significant internal liability that could impact cash flow if repayments are demanded or if additional external financing is sought. Net current assets are positive, but the company should be monitored for its ability to convert stock to cash and manage director loan repayments.

4. Monitoring Points:

• Ongoing cash flow and liquidity position, particularly cash balances and stock turnover.
• Management of director loan accounts and potential impact on working capital.
• Contract profitability and recognition of turnover as per accounting policies, given the construction sector's project-based nature.
• Timely filing of future accounts and confirmation statements to ensure regulatory compliance.
• Any changes in ownership or significant control that may affect governance or financial stability.