CRESTA HOUSE (LUTON) LIMITED

Executive Summary

Cresta House (Luton) Limited is a property investment entity with a strong asset base and improving equity, but it faces liquidity challenges due to a working capital deficit and limited cash reserves. The company’s creditworthiness depends on stable rental income and effective management of short-term liabilities. Conditional approval is advised with ongoing scrutiny of liquidity and debt servicing capabilities.

CRESTA HOUSE (LUTON) LIMITED - Analysis Report

Company Number: 13625817

Analysis Date: 2025-07-29 14:33 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Cresta House (Luton) Limited shows a solid asset base dominated by investment property, with net assets improving substantially from £1.7m in 2022 to £2.86m in 2023. However, current liabilities are significantly higher than current assets, resulting in negative net working capital. The company relies heavily on long-term creditors (loans or intercompany debt) totaling approximately £8 million. While equity has increased, the liquidity position is weak and cash resources are limited. Approval is recommended on condition of close monitoring of liquidity and confirmation of stable rental income or cash inflows to cover short-term obligations.

2. Financial Strength
   The company’s balance sheet is asset-heavy with £11.26m in fixed assets, primarily investment property valued at £11.185m after a strong fair value gain of £1.24m in 2023. Shareholders’ funds nearly doubled year-on-year, reflecting retained profits and capital injection, indicating improved solvency. However, current liabilities exceed current assets by £186k, causing a working capital deficit. Long-term creditors remain stable at around £8m, suggesting substantial debt financing. Overall, the company demonstrates reasonable capitalisation and asset backing but weak liquidity.

3. Cash Flow Assessment
   Cash at bank is low (£60.8k), and combined with a net current liability position, this indicates potential short-term liquidity risk. Debtors have increased to £131.8k but remain modest relative to liabilities. The company has zero employees, implying low operational cash outflows. Without audited cash flow statements, the ability to service short-term liabilities depends heavily on rental income generated from investment properties or related group funding. The presence of significant long-term debt requires assurance of steady income streams or refinancing capability.

4. Monitoring Points

• Liquidity ratios and working capital trends: watch for improvements or deterioration in current assets vs. current liabilities.
• Rental income stability and timing of cash collections from debtors.
• Changes in fair value of investment properties and impact on asset values.
• Debt servicing capacity and any refinancing or repayment plans concerning the £8m long-term creditors.
• Updates on any changes in control or management impacting governance or financial strategy.