C & R CLAYTON INVESTMENTS LIMITED

Executive Summary

C & R Clayton Investments Limited shows significant solvency and liquidity concerns, notably a negative net current asset position and heavy secured debt against property assets. While compliant with statutory filings and stable in governance, the company’s financial structure and revaluation losses suggest risk to operational sustainability without further capital or improved cash flow. Further detailed due diligence on loan terms, cash flow, and asset valuations is recommended.

C & R CLAYTON INVESTMENTS LIMITED - Analysis Report

Company Number: 14121269

Analysis Date: 2025-07-20 13:19 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity risks due to very high current liabilities relative to cash and negative net current assets. Although it holds substantial fixed assets, these are encumbered by secured bank loans almost equal to their value, limiting financial flexibility.

2. Key Concerns:

• Liquidity Risk: Cash at bank is extremely low (£1,015) against current liabilities of over £936k, resulting in a negative net current asset position (-£313k). This indicates potential cash flow difficulties in meeting short-term obligations.
• High Leverage: The company has secured bank loans of £936,496 with fixed charges on properties valued at £1,285,000, leaving little equity buffer and exposing it to refinancing or covenant risks.
• Declining Equity and Revaluation Loss: Net assets have decreased from £55,031 in 2023 to £35,187 in 2024, driven by a revaluation loss of £33,475 on investment properties, which may reflect deteriorating asset values or market conditions.

3. Positive Indicators:

• Compliance and Filings: The company is current with both accounts and confirmation statement filings, showing no overdue returns or compliance issues.
• Stable Directorship and Control: Directors are consistent since incorporation, both with significant control and no records of disqualification or governance issues.
• Business Model: Operating in real estate investment and letting, a potentially stable sector if managed prudently, supported by tangible fixed assets.

4. Due Diligence Notes:

• Investigate the terms and covenants of the secured bank loan to assess refinancing risk and lender flexibility.
• Review cash flow forecasts and working capital management plans to understand how the company intends to cover short-term liabilities given minimal cash reserves.
• Assess the reason for the property revaluation loss and its impact on future earnings and asset valuations.
• Confirm whether the company has any contingent liabilities or off-balance-sheet commitments not disclosed in filleted accounts.
• Examine rental income streams and tenant stability, given the reliance on property investment operations.