CREANDUM ADVISOR LLP

Executive Summary

Creandum Advisor LLP shows consistent net asset growth and a solid fixed asset base but faces liquidity challenges due to negative working capital and substantial current liabilities owed to group entities. The company remains a going concern with positive profitability, yet cash flow management and short-term debt servicing require close monitoring. Conditional credit approval is advised, emphasizing liquidity improvement and prudent financial stewardship going forward.

CREANDUM ADVISOR LLP - Analysis Report

Company Number: OC437835

Analysis Date: 2025-07-29 13:16 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Creandum Advisor LLP exhibits stable net asset growth and controls significant fixed assets, but persistent negative working capital (net current liabilities around £247k in 2024) signals liquidity pressure. The high current liabilities relative to current assets raise concerns about short-term debt servicing ability, especially given the reliance on amounts owed to group undertakings (£589k). The company’s going concern status and positive profit in 2024 (+£5k) are reassuring, yet the large members’ remuneration charged as an expense (£795k) may impact cash reserves. Approval is recommended with conditions requiring monitoring of liquidity and prompt repayment plans for current liabilities.

2. Financial Strength:
   The LLP has a modest but improving net asset base (£163k in 2024, up from £159k in 2023 and £21k in 2021). Tangible fixed assets are substantial (£410k), mainly short leasehold land/buildings and office equipment, which suggests some asset backing. However, the capital structure is mostly members’ interests classified as liabilities (£162,876k), implying internal funding rather than external debt. The balance sheet shows no long-term borrowing but significant current liabilities primarily owed to group undertakings, which may reflect intra-group financing rather than third-party debt.

3. Cash Flow Assessment:
   Cash balances decreased from £246k in 2023 to £160k in 2024, while debtors increased from £181k to £282k, worsening working capital. The negative net current assets (£-247k) indicate potential short-term liquidity constraints. The company’s ability to convert debtors into cash timely and negotiate extended payment terms with creditors, especially related parties, will be critical. The high members’ remuneration expense charged but matched by drawings suggests cash outflows to members could strain liquidity if not managed carefully.

4. Monitoring Points:

• Liquidity ratios (current ratio and quick ratio), focusing on improvement in net current assets.
• Turnover and debtor collection efficiency to ensure cash inflows align with obligations.
• Management of intra-group balances and repayment schedules for amounts owed to group undertakings.
• Members’ remuneration and drawings to ensure they do not compromise operational cash flow.
• Timely filing of future accounts and confirmation statements to avoid compliance risks.