COASTAL PROPERTIES MANAGEMENT LTD

Executive Summary

Coastal Properties Management Ltd has demonstrated early-stage recovery in net asset value driven by property revaluation gains, but current liquidity constraints and negative working capital pose risks. The company’s ability to service debt relies heavily on rental income and potential director support. Conditional credit approval is recommended with ongoing monitoring of cash flow, loan servicing, and asset valuations to mitigate financial risks.

COASTAL PROPERTIES MANAGEMENT LTD - Analysis Report

Company Number: 14078000

Analysis Date: 2025-07-20 15:37 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Coastal Properties Management Ltd is a very young private limited company incorporated in 2022, operating in real estate investment and management. The company’s financials show a positive turnaround in net assets from a negative £10,767 in 2023 to a positive £19,701 in 2024, driven primarily by a revaluation increase in investment properties. However, the company continues to exhibit a working capital deficiency with net current liabilities of approximately £80k, indicating liquidity constraints. The significant long-term bank loan of £180k adds a repayment obligation that must be closely monitored. Approval of credit facilities may be considered given the asset base and improving equity position, but with conditions requiring close cash flow monitoring and potential security over the investment property.

2. Financial Strength:
   The company’s balance sheet is asset-heavy, dominated by investment properties valued at £280,000 as of April 2024, up from £255,568 the prior year. This appreciation reflects positive asset revaluation gains recognized in profit and loss. Shareholders' funds have improved significantly, now positive at £19,701, indicating an improving cushion for creditors. However, current liabilities (£83,643) and long-term liabilities (£180,000 bank loans) remain substantial relative to liquid assets (£3,344 cash), resulting in negative working capital of about £80k. The company shows some financial resilience via asset appreciation but remains reliant on external funding and has limited liquid resources.

3. Cash Flow Assessment:
   Cash at bank is minimal (£3,344), insufficient to cover short-term creditors (£83,643), indicating a liquidity strain. Negative net current assets suggest working capital deficits that could impair the ability to meet short-term obligations without refinancing or additional capital injection. The sole director/shareholder controls the business and has demonstrated commitment since inception, which is positive. However, the absence of detailed cash flow statements limits insight into operating cash generation. Given the nature of the business (property letting and management), cash flow volatility is possible depending on rental income timing and capital expenditure needs.

4. Monitoring Points:

• Working capital position: Watch for improvement in current assets and reduction of short-term creditors.
• Servicing of bank loans: Confirm regular repayments and covenant compliance.
• Rental income stability and property occupancy rates: Critical for ongoing cash generation.
• Further asset revaluations: Monitor for potential impairments or market downturn impacts.
• Director’s ongoing financial support or capital injections if liquidity issues persist.