CPT RECOVERY LTD

Executive Summary

CPT RECOVERY LTD shows signs of financial stress with a negative net asset position and working capital deficit despite asset growth. The company’s ability to meet short-term obligations is constrained, warranting conditional credit approval with close liquidity monitoring. Management’s ability to stabilize cash flow and rebuild equity is critical for ongoing creditworthiness.

CPT RECOVERY LTD - Analysis Report

Company Number: 12485951

Analysis Date: 2025-07-20 13:13 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   CPT RECOVERY LTD is a micro-entity operating primarily in the public houses and bars sector, with additional activities in freight transport and vehicle maintenance. The company shows modest net assets but has deteriorated into a net liability position as of the latest accounts (Feb 2024), with a negative shareholders’ funds of £9,360 compared to a positive £3,056 the prior year. This indicates a recent financial strain or losses. The presence of creditors due after more than one year (£25,078) suggests some long-term obligations that must be managed carefully. Given the limited scale, no employees, and relatively low capital, the company’s ability to service short-term debt is challenged, but not necessarily impaired if cash flow remains steady. Approval is conditional on monitoring liquidity and profitability improvements.

2. Financial Strength:
   The balance sheet shows fixed assets growing from £62.8k to £88.2k over the past year, reflecting investment or asset acquisition. However, current liabilities have increased sharply from £61.7k to £88.6k, outpacing current assets growth (£14.1k to £16.6k), resulting in a worsening net current liabilities position. The total net assets decreased from positive £3,056 to negative £9,360, indicating erosion of equity and financial stress. The company has minimal share capital (£1), and the largest shareholder owns 75-100%. Overall, the financial strength is weak with declining equity and increasing liabilities, signaling caution.

3. Cash Flow Assessment:
   Net current liabilities of approximately £71,967 (current liabilities exceed current assets) indicates a working capital deficit, which raises concerns about the company’s short-term liquidity. The lack of employees suggests low operating overhead but also limited capacity to generate or scale revenues. Without detailed cash flow statements, it is unclear if operating cash flows can cover short-term obligations. The increase in long-term creditors adds pressure on future cash outflows. Cash flow risks exist and should be closely monitored, especially given the sector’s exposure to economic cycles.

4. Monitoring Points:

• Quarterly tracking of cash balances and working capital to ensure liquidity improvements.
• Profitability trends and whether losses continue to erode net assets.
• Changes in creditor terms, particularly long-term liabilities that may affect solvency.
• Management actions to improve cash flow or reduce debt burden.
• Market conditions impacting the public house and freight transport sectors.