BUFF BROWZ GROUP LTD

Executive Summary

Buff Browz Group Ltd is a young but growing retail business with improving net assets and working capital, supported by related party funding. While cash balances provide some liquidity, high current liabilities and dependence on intercompany balances present risks that warrant conditional credit approval with ongoing monitoring of liquidity and related party exposure. Continued profitability and working capital management will be key to strengthening the company’s credit profile.

BUFF BROWZ GROUP LTD - Analysis Report

Company Number: 14759759

Analysis Date: 2025-07-29 13:20 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Buff Browz Group Ltd is a newly incorporated private limited company with active trading in retail via internet/mail order (SIC 47910). The latest unaudited accounts show a positive net asset position of £80,706, a significant improvement from £100 the prior year, indicating initial growth and capitalisation. The company holds substantial stock (£449k) and current assets (£661k), supported by cash of £110k. However, current liabilities are high at £587k, mainly trade creditors and related party balances, which tightens liquidity. The company is reliant on related party funding and intercompany balances which are interest-free and repayable on demand, posing some risk if these are withdrawn. Given the limited trading history (just over 2 years) and related party exposure, credit approval should be conditional on monitoring cash flow closely and ensuring continued support or improvement in working capital metrics.

2. Financial Strength:
   The balance sheet shows a modest but growing net asset base supported by tangible and intangible fixed assets (£8k total). Shareholders’ funds have increased markedly due to retained profits (£80.6k P&L reserve) reflecting initial profitability or capital injections. The company’s working capital position has improved, with net current assets of £73k versus just £100 last year. Stock levels have increased significantly, indicating business expansion but also potential inventory risk if stock liquidation is slow. High current liabilities largely comprising trade creditors and amounts owed to related companies (£335k combined) require attention as these are repayable on demand, posing refinancing risk. No long-term debt is reported, which limits financial leverage risk. Overall, the financial strength is modest but improving with a need for careful management of creditor balances and stock.

3. Cash Flow Assessment:
   Cash at bank of £110k provides a reasonable buffer for near-term obligations, but the company’s current liabilities of £587k considerably exceed cash, relying on stock and receivables to meet these. Debtors include significant amounts due from group companies (£96.7k), which are interest-free and repayable on demand, introducing potential liquidity risk if intercompany support ceases. The improvement in net current assets from £100 to £73k is encouraging but still relatively thin coverage given trading scale. There is limited historical cash flow data, but given the company’s growth stage and related party dependency, liquidity should be monitored carefully. Maintaining or increasing cash balances and improving debtor collection will be essential to cover creditor demands.

4. Monitoring Points:

• Liquidity ratios: Current ratio and quick ratio to ensure working capital remains positive and not reliant on related party funding.
• Stock turnover and aging: To mitigate inventory obsolescence risk given large stock holdings.
• Related party balances: Monitor increases in amounts owed to and from connected companies to assess dependency and repayment risk.
• Profitability trends: Track continued profit generation and accumulation of reserves to strengthen equity base.
• Timely filing: Continue to meet statutory filing deadlines to avoid compliance risks.