CHAPMANS MANAGEMENT LTD

Executive Summary

Chapmans Management Ltd exhibits moderate solvency risk due to its negative working capital and reliance on secured debt and director loans. However, the company shows growth in net assets and maintains regulatory compliance with no overdue filings. Further scrutiny of asset valuations and short-term liquidity management is recommended to fully assess operational stability and financial sustainability.

CHAPMANS MANAGEMENT LTD - Analysis Report

Company Number: 12827445

Analysis Date: 2025-07-20 15:56 UTC

1. Risk Rating: MEDIUM
   The company’s financial statements indicate a moderate level of solvency risk primarily due to significant current liabilities exceeding current assets by a wide margin, resulting in negative net working capital. However, the large fixed asset base in investment properties and positive net assets provide some cushion. The absence of overdue filings and ongoing active status reduce governance risk.

2. Key Concerns:

• Liquidity Risk: Current liabilities of £684k significantly exceed current assets of £10.5k, resulting in a net current liability position of approximately £445k. This suggests potential cash flow difficulties in meeting short-term obligations.
• High Leverage: The company carries bank loans of £684k secured against its assets, and also owes £448k interest-free to directors, indicating leveraged funding and potential reliance on related party financing.
• Valuation and Accounting Policies: Investment properties are director-valued without professional valuation, which may affect asset reliability and impair transparency for investors relying on these valuations.

3. Positive Indicators:

• Growing Net Assets: Net assets have increased from £25k in 2023 to £93k in 2024, demonstrating growth in equity.
• No Overdue Filings: Both accounts and confirmation statement filings are up to date, indicating compliance with regulatory requirements.
• Ownership and Control: Single director and 100% shareholder Mr. Colin David Chapman provides clear accountability and control over the business.

4. Due Diligence Notes:

• Verify the basis and reliability of the directors’ valuation of investment properties, potentially obtaining an independent professional valuation.
• Review detailed cash flow statements and creditor repayment schedules to assess short-term liquidity management and the sustainability of director loans.
• Investigate terms and covenants of the bank loans secured on assets, including repayment schedules and risk of enforcement.
• Confirm the company’s revenue streams, lease terms, and tenant stability given the nature of property management operations.