CHASE AFFINITY LTD

Executive Summary

Chase Affinity Ltd has improved its liquidity and net asset position in 2024 by converting fixed assets into stock and repaying director loans, which reduces long-term creditor risk. However, the absence of fixed assets and increased current liabilities necessitate careful monitoring of working capital and cash flow sustainability. Conditional approval is recommended pending further assurance on operational cash flows and working capital management.

CHASE AFFINITY LTD - Analysis Report

Company Number: 13060475

Analysis Date: 2025-07-19 12:04 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Chase Affinity Ltd shows improving liquidity and net asset position in 2024 compared to prior years, reducing current liabilities significantly and converting fixed assets into stock and cash. However, the absence of fixed assets and the large director loan clearance in 2024 raise questions about asset conversion strategy and potential reliance on director funding. The company operates in real estate letting, which can be stable but sensitive to market conditions. Approval is contingent on obtaining further clarity on the sustainability of cash flows and plans for working capital management.

2. Financial Strength:

• The company’s net assets improved to £38k in 2024 from £21k in 2023, reflecting a stronger equity base.
• Fixed assets were fully disposed of in 2024, replaced by stock valued at £178k and increased current assets overall.
• The director loan account was fully repaid in 2024, improving long-term creditor risk but shifting obligations to short-term liabilities (£179k current liabilities).
• Share capital remains minimal at £100, indicating limited shareholder equity buffer.
• The company is small, meeting small company exemption criteria, filing full accounts but unaudited.

3. Cash Flow Assessment:

• Cash reduced from £51k to £39k, but current assets increased substantially due to stock (£178k) introduced in 2024.
• Net current assets improved from negative £93k in 2023 to positive £38k in 2024, indicating better short-term liquidity.
• Debtors are minimal (£785), suggesting limited credit risk from receivables but also limited immediate cash inflow from customers.
• Current liabilities mainly consist of social security/taxes (£92k) and director loans repaid within the year, implying potential timing risk around tax payments and working capital demands.
• The company employs only one person, which limits payroll burden but possibly restricts operational capacity.

4. Monitoring Points:

• Monitor working capital cycle closely, especially management of stock and timing of tax liabilities to avoid liquidity strain.
• Review cash flow forecasts to confirm sustained positive liquidity given disposal of fixed assets and increased stock levels.
• Assess revenue generation and rent collection trends in the real estate letting sector to ensure ongoing income stability.
• Track director involvement and potential for further loans or withdrawals, as director loans have been material in the past.
• Watch for any changes in company size or filing category that would affect audit or reporting requirements.