CARDIFF CHRISTMAS FESTIVAL LIMITED

Executive Summary

Cardiff Christmas Festival Limited is currently financially weak with persistent losses, negative net assets, and a significant working capital deficit. The company depends heavily on related-party loans and director funding to support operations, raising concerns about its ability to service external credit. Given these factors and limited tangible assets, credit extension is not recommended until substantial financial improvements are evidenced.

CARDIFF CHRISTMAS FESTIVAL LIMITED - Analysis Report

Company Number: 14078861

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

1. Credit Opinion: DECLINE

Cardiff Christmas Festival Limited presents significant credit risk. The company has persistent and growing net current liabilities, negative net assets, and ongoing losses since inception. Despite being active and relatively new (incorporated 2022), the company’s financial position shows an erosion of equity and a working capital deficit worsening from £136k negative to £166k negative in the last year. It also relies on director loans and related-party funding, indicating possible liquidity issues. The nature of the performing arts industry (SIC 90010) can be volatile and discretionary, which increases operating risk. The company's ability to meet short-term obligations or service new debt is doubtful without material improvement or external support.

2. Financial Strength:

• Negative net assets of £102k as of 31 January 2024, worsening from £94k negative the prior year.
• Tangible fixed assets are minimal (£589) relative to liabilities.
• Current liabilities (£348k) significantly exceed current assets (£182k), resulting in a negative working capital position of £166k.
• The company has accumulated losses (Profit & Loss Reserve of -£102k).
• Related party loans from Tickledom Theatrical Productions Ltd (£99k) and director loan accounts (£25k) form a material part of liabilities, signaling dependence on insider funding.
• No retained earnings or reserves to absorb further losses.

3. Cash Flow Assessment:

• Cash on hand is low (£10.8k), insufficient to cover even a fraction of current liabilities.
• Debtors have increased to £171k, but these may be subject to collection risk; no indication of their aging or impairment is provided.
• Negative net current assets reflect a working capital shortfall, implying the company cannot comfortably meet short-term liabilities out of readily available assets.
• Reliance on related-party and director loans suggests cash flow constraints.
• No evidence of positive operating cash flow or profitability to support debt servicing.

4. Monitoring Points:

• Improvement in working capital position and net assets through either profitability or capital injection.
• Debtor collections and aging profile to assess liquidity risk.
• Ongoing reliance on related-party or director funding and terms of such loans.
• Future trading performance and cash flow generation from operations.
• Changes in industry environment impacting revenue streams, especially given the discretionary nature of performing arts events.
• Compliance with filing deadlines and any director changes or disqualification risks.