BUSHBAY LIMITED
Company number 05688656 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Commercial Credit Assessment: BUSHBAY LIMITED
1. Credit Opinion: DECLINE
The primary basis for this decision is the company's status as "Active - Proposal to Strike Off". This indicates an application has been made to remove the company from the Companies House register, which is fundamentally incompatible with extending new credit facilities. Regardless of the financial position, lending to a company in the process of dissolution presents unacceptable risk.
Even setting aside the strike-off status, the underlying credit fundamentals present material concerns:
- Heavy intercompany dependency: £1.52M owed by group undertakings represents 96.9% of total debtors – liquidity is entirely dependent on group cash flows
- Low cash reserves: Only £38,322 against current liabilities of £1.14M
- Surging trade creditors: Increased from £83K to £324K (290% increase year-on-year), suggesting potential payment difficulties
- Secured bank charge: Existing lender holds fixed and floating charge over assets, ranking ahead of any new credit
2. Financial Strength
Balance Sheet Summary (Year Ending 31 March 2025)
| Metric | 2025 | 2024 | Movement |
|---|---|---|---|
| Net Assets | £757,916 | £614,534 | +23.3% |
| Total Assets | £1,951,651 | £1,689,899 | +15.5% |
| Total Liabilities | £1,140,160 | £951,822 | +19.8% |
| Shareholders' Funds | £757,916 | £614,534 | +23.3% |
Positive indicators: - Net assets have grown consistently over the historical period (£328K in 2018 to £758K in 2025) - Positive retained earnings (£756,916) indicating cumulative profitability - Share capital maintained at £1,000
Concerning factors: - The asset base is dominated by intercompany receivables (£1,516,900 of £1,787,132 current assets = 84.9%) - Tangible fixed assets have declined from £229K to £165K through depreciation exceeding additions - Provisions of £41,075 (down from £56,877) – nature undisclosed but represents potential future outflows - Gearing ratio (total liabilities/net assets) stands at 1.50:1 – moderately leveraged
Assessment: The balance sheet presents a veneer of strength that is largely illusory. The net asset position is inflated by intercompany balances that may not be readily realisable, and the company has minimal standalone asset backing.
3. Cash Flow Assessment
Liquidity Position
| Metric | 2025 | 2024 |
|---|---|---|
| Current Assets | £1,787,132 | £1,461,058 |
| Current Liabilities | £1,140,160 | £951,822 |
| Net Current Assets | £646,972 | £509,236 |
| Cash | £38,322 | £53,686 |
Current Ratio: 1.57:1 (appears adequate but misleading)
Quick Ratio: 1.41:1 (excluding inventories)
However, these ratios are significantly distorted by the intercompany debtor of £1.52M. If we exclude this non-trade receivable:
- Adjusted Current Assets: £270,232
- Adjusted Current Ratio: 0.24:1 – critically insufficient
Cash Flow Concerns:
- Cash has declined 28.6% from £53,686 to £38,322 despite reported profit growth
- Trade creditors surged from £83K to £324K – a potential indicator of cash preservation through payment stretching
- Taxation liability of £160,693 (up from £99,840) – significant near-term cash requirement
- Bank overdraft of £50,000 – facility usage suggests tight cash position
- Zero employees – the company appears to operate as a vehicle within a group structure rather than a standalone trading entity
Working Capital Assessment: The company is functionally dependent on group undertakings for liquidity. Without intercompany support, the standalone cash position is severely constrained.
4. Monitoring Points
Should circumstances change (e.g., strike-off action resolved, restructuring within group), the following metrics require ongoing monitoring:
| Metric | Current Position | Watch Threshold | Rationale |
|---|---|---|---|
| Company status | Proposal to Strike Off | Must return to Active | Absolute prerequisite for any credit consideration |
| Intercompany balance quality | £1.52M receivable | Any increase above £1.6M | Further concentration increases dependency risk |
| Cash position | £38,322 | Below £25,000 | Signals acute liquidity stress |
| Trade creditors days | £324K (sharply rising) | Any continued increase | Indicates payment difficulties to third parties |
| Tax liability | £160,693 | Over £200K | HMRC debt priority in insolvency |
| Current ratio (adjusted) | 0.24:1 ex-intercompany | Below 0.5:1 | Standalone liquidity sufficiency |
| Net current assets | £646,972 | Below £400K | Erosion of working capital buffer |
Additional Investigation Required: - Confirmation of the reason for strike-off application and whether it will be withdrawn - Group structure and cash flow arrangements – understanding of intercompany settlement terms - Nature of the £41,075 provision - Details of the secured bank facility (terms, maturity, covenants) - Relationship with J&S Lyle Holdings and Mr Caston's involvement