C & R REES PROPERTY LTD

Executive Summary

C & R REES PROPERTY LTD’s financials show a weakening position with negative net assets and working capital, signaling liquidity risks. While the company owns significant fixed assets, current liabilities exceed current assets substantially, raising concerns about short-term debt servicing. Credit approval is possible but should be conditional on enhanced security or assurances of improved cash flow to mitigate repayment risk.

C & R REES PROPERTY LTD - Analysis Report

Company Number: 13634996

Analysis Date: 2025-07-20 14:58 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   C & R REES PROPERTY LTD shows a concerning deterioration in net assets and working capital in its latest financial year, moving from positive equity and net current assets to negative figures. The company operates in the real estate letting and trading sector, which can be capital intensive and sensitive to market fluctuations. The negative net assets of £49,585 and a significant negative net current asset position (£168,073) indicate liquidity stress and potential difficulty in meeting short-term obligations without external support. However, the company is still active, has no overdue filings, and is managed by two directors with relevant business experience. Credit approval could be considered if mitigating factors such as additional security, personal guarantees from the shareholders (who control 25-50% shares each), or evidence of imminent cash inflows are provided.

2. Financial Strength:
   The balance sheet reveals a fixed asset base of £328,838, presumably property holdings, which remain stable across years. However, current assets are minimal (£9,819) and overshadowed by current liabilities (£210,350), resulting in a negative working capital position. The company’s liabilities include a significant long-term creditor balance (£210,350), which exacerbates the negative net asset position. The decline from net assets of £29,122 in 2023 to a deficit highlights erosion of equity, possibly due to trading losses or increased borrowings. This weak equity base limits the company’s financial flexibility and indicates vulnerability to adverse market conditions.

3. Cash Flow Assessment:
   The very low current assets relative to current liabilities suggest tight liquidity and potential cash flow difficulties. Negative net current assets imply the company may struggle to meet short-term commitments from operating cash flows alone. The absence of detailed profit and loss data or cash flow statements limits full assessment, but the working capital deficit is a red flag. The company must be monitored for timely settlement of creditors and any signs of late payments or defaults. Given the small size and limited employees (2 staff), there may be limited operational overheads, but the cash position remains fragile.

4. Monitoring Points:

• Quarterly updates on liquidity position and working capital movements
• Regular review of debt servicing capability especially in relation to long-term creditor obligations
• Monitoring any changes in asset valuations or disposals that could improve cash flow
• Watch for any director or shareholder capital injections or loan restructuring
• Timely filing of all statutory accounts and confirmation statements to ensure transparency
• Market conditions in real estate sector that may impact rental income or asset values