CHESHIRE LETTINGS AGENCY LTD

Executive Summary

Cheshire Lettings Agency Ltd shows signs of financial strain with deteriorating liquidity and declining net assets, although it remains solvent and operational. Conditional credit approval is recommended, subject to close monitoring of working capital, cash flow, and debt obligations to ensure ongoing debt servicing capability. The company’s relatively recent establishment and sector exposure warrant cautious credit management going forward.

CHESHIRE LETTINGS AGENCY LTD - Analysis Report

Company Number: 12881012

Analysis Date: 2025-07-29 18:36 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Cheshire Lettings Agency Ltd is an active private limited company operating in the real estate agency sector. The company exhibits some financial strain as evidenced by declining net current assets turning negative in the latest financial year (2024), indicating liquidity pressure. However, it remains solvent with positive net assets and shareholders’ funds, albeit reduced from prior years. The presence of finance leases and hire purchase obligations suggests moderate leverage but manageable if cash flows improve. Given the company’s relatively recent incorporation (2020) and the sector’s dependency on market conditions, approval for credit would be conditional upon regular monitoring of liquidity and cash flow metrics, and possibly limitations on facility size.

2. Financial Strength:
   The company’s net assets have declined from £1,037 in 2023 to £704 in 2024, showing erosion of equity. Fixed assets have decreased slightly (£9,548 to £8,864), and current assets dropped significantly (£9,439 to £2,819), mainly due to the elimination of debtors (£8,583 to £0) and a fall in cash balances. Current liabilities are stable at around £4,000, but long-term liabilities (finance leases) have reduced from £13,899 to £6,666, indicating some debt repayment. The balance sheet reveals a weakening working capital position (net current liabilities of £1,494) which raises concerns about short-term solvency despite positive net assets.

3. Cash Flow Assessment:
   There is no direct cash flow statement, but cash at bank rose from £855 to £2,819 in 2024, which is positive. However, the removal of trade and other debtors to zero suggests potential collection or revenue recognition issues or a change in credit policy. Negative net current assets indicate the company may be relying on longer-term financing or delayed payments to meet short-term obligations. The finance lease obligations remain significant but are reducing, which may improve future cash flow requirements. Overall, liquidity is tight and the company needs to maintain or improve cash generation to service debts comfortably.

4. Monitoring Points:

• Continued tracking of net current assets and liquidity ratios to detect further deterioration.
• Monitoring cash flow generation from operations, including debtor collection and creditor payment terms.
• Review of lease and hire purchase obligations and their impact on future cash outflows.
• Watch for any late filings or changes in director or control status.
• Monitor sector and local real estate market trends affecting revenue stability.
• Evaluate profitability trends when full P&L data becomes available to assess operational viability.