Company Number: 13558209

Analysis Date: 2025-07-19 12:57 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Cherry Holdings Limited demonstrates a positive net asset position and improving equity over the past three years, indicating some financial stability. However, the company carries significant long-term liabilities relative to current assets, and the working capital position, though improved, remains modest. The absence of trading profits and reliance on director advances suggest limited cash generation from operations. Approval is recommended with conditions including regular monitoring of liquidity metrics and requiring updated financial forecasts showing sustainable cash flows to service debt.

2. Financial Strength:
   The company’s fixed assets remain stable at £957k, representing its primary asset base. Net assets have grown from £224.6k in 2021 to £479.5k in 2024, reflecting gradual equity strengthening. However, current liabilities are substantial (£553k in 2024), creating pressure on short-term liquidity despite net current assets of £75k. Long-term creditors remain high but show a slight reduction. Overall, the balance sheet is sound on a net asset basis but carries moderate leverage and some liquidity risk.

3. Cash Flow Assessment:
   Current assets increased to £157.8k in 2024, improving working capital from marginally positive in prior years. The company holds no employees and appears to operate with minimal ongoing expenses, which may limit cash outflows. However, the financials reveal director advances and credits with a balance of £34.7k owed to the director, indicating dependence on related party funding. The company’s liquidity position could be vulnerable if external funding or director support diminishes.

4. Monitoring Points:

• Monitor changes in current liabilities and working capital to ensure continued positive liquidity.
• Review director advances and repayment patterns for signs of financial stress or funding gaps.
• Obtain regular management accounts to track cash flow trends and debt servicing capacity.
• Watch for any material changes in fixed asset valuations or potential impairments.
• Assess any new borrowing or credit facilities impacting leverage and repayment ability.