CORACLE PROPERTY LTD

Executive Summary

Coracle Property Ltd faces significant liquidity and solvency risks due to negative working capital and high debt levels, despite a recent improvement in net assets driven by property revaluation. The company’s reliance on director loans and associated party debts poses additional concerns. While regulatory compliance is current and asset values have increased, further scrutiny of asset valuations and debt terms is advisable to confirm financial stability.

CORACLE PROPERTY LTD - Analysis Report

Company Number: 12824528

Analysis Date: 2025-07-20 16:37 UTC

1. Risk Rating: HIGH
   The company exhibits a high risk profile primarily due to significant negative net current assets and substantial current liabilities that far exceed cash on hand, indicating potential liquidity challenges. The ongoing reliance on director loans and large long-term debts further exacerbates solvency concerns despite reported positive net assets driven by revalued investment properties.

2. Key Concerns:

• Liquidity Deficiency: Cash at bank is only £928 against current liabilities of £108,074 in 2023, resulting in negative net current assets of £107,146, highlighting risk in meeting short-term obligations.
• High Debt Levels: Total creditors falling due after more than one year stand at £356,687, including loans and associated company debt, creating a heavy financial burden on the company.
• Reliance on Director Funding: Significant amounts owed to the director (£85,412, interest-free and repayable on demand) indicate dependence on related-party financing which may not be sustainable or reliable in distress.

3. Positive Indicators:

• Investment Property Growth: The value of investment properties almost doubled from £277,765 in 2022 to £535,939 in 2023, enhancing asset backing and net asset position.
• Positive Net Assets: After prior years of negative net assets, the company reported net assets of £41,605 in 2023, largely due to fair value revaluation reserve of £91,504.
• Compliance Status: All statutory filings including accounts and confirmation statements are up to date with no overdue reports, indicating good regulatory compliance.

4. Due Diligence Notes:

• Verify the valuation methodology and market assumptions underpinning the large increase in investment property value to ensure asset realizability.
• Investigate the terms and security of loans, particularly those from associated companies and director loans, to assess refinancing risk and creditor priority.
• Review detailed cash flow forecasts and working capital management plans to confirm the company’s ability to meet short-term liabilities without additional external funding.
• Examine any contingent liabilities or provisions (notably the £30,501 provision in 2023) to understand potential future cash outflows.
• Assess director’s statement on going concern in light of liquidity strain and debt profile.