CITRUS (LOWESTOFT) LIMITED

Executive Summary

Citrus (Lowestoft) Limited is an early-stage building development company with a positive but shrinking net asset base and notably decreased cash reserves in the last year. While current liabilities are manageable and no overdue filings exist, liquidity is tighter, warranting conditional credit approval subject to updated cash flow visibility and operational performance monitoring. Continuous oversight of working capital components and project pipelines is essential to mitigate repayment risk.

CITRUS (LOWESTOFT) LIMITED - Analysis Report

Company Number: 13737854

Analysis Date: 2025-07-29 14:24 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Citrus (Lowestoft) Limited is a young company incorporated in late 2021, operating in the development of building projects. The company remains active with timely filings and no overdue returns or accounts. However, its financials reveal a significant reduction in net current assets from £237k in 2023 to £139k in 2024, largely due to a steep decline in cash at bank from £396k to £40k. While current liabilities have been reduced substantially, the company’s cash buffer is now tighter and debtors have increased. The company’s ability to service debt depends on its capacity to convert debtors and stock into cash promptly and to control costs. Given the limited trading history and reduced liquidity, credit approval should be conditional on updated cash flow forecasts and confirmation of ongoing contract pipelines.

2. Financial Strength:
   The balance sheet shows net assets of £139k, down from £237k the prior year, indicating a contraction in equity. Share capital is nominal (£120), with the majority of equity represented by retained earnings. Stock levels remain constant at £69.7k, suggesting inventory management stability. Debtors increased markedly to £58.3k, including a corporation tax receivable of £27.5k, which could be short-term recoverable but requires verification. Current liabilities have fallen significantly to £28.6k, predominantly trade creditors. Overall, the company holds a positive net current asset position, but the decline in cash reserves warrants close scrutiny.

3. Cash Flow Assessment:
   Cash at bank has fallen from £396k to £40k year-on-year, a material decrease that raises liquidity concerns. Net current assets remain positive but reduced, highlighting tighter working capital. The increase in debtors could pressure cash flow if collection terms are prolonged. Stocks are stable but represent tied-up capital. The company employs only three staff including directors, indicating a small operational scale. The absence of long-term debt on the balance sheet is positive, limiting fixed financial obligations. Continued monitoring of cash conversion cycles and debtor ageing will be critical to ensure ongoing liquidity.

4. Monitoring Points:

• Monitor cash balances and bank statements monthly to detect liquidity stress early.
• Review debtor ageing reports to ensure timely collections and assess credit risk of customers.
• Track stock turnover to avoid accumulation of obsolete inventory.
• Obtain and assess regular management accounts and updated cash flow forecasts.
• Confirm pipeline of projects and contract wins to validate future revenue streams.
• Watch for changes in director appointments as recent resignations and appointments occurred in October 2024.