CTA PROPERTY HOLDINGS LIMITED

Executive Summary

CTA Property Holdings Limited presents a financially leveraged profile with significant secured debt against a stable investment property asset. The company’s negative equity and limited liquidity necessitate cautious credit consideration, supported by the parent company’s involvement. Continued monitoring of cash flow generation and debt servicing capability is essential before increasing credit exposure.

CTA PROPERTY HOLDINGS LIMITED - Analysis Report

Company Number: 13270289

Analysis Date: 2025-07-20 13:50 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   CTA Property Holdings Limited operates in the real estate management sector and holds a significant investment property asset funded largely by secured debt. The company exhibits persistent negative net asset value (NAV) and net liabilities, indicating undercapitalization. However, the secured nature of the main bank loan against the investment property and the company's ongoing operations reduce immediate credit risk. Approval is conditional on closely monitoring the company's ability to service debt, maintain rental income, and avoid further erosion of equity. The parent company’s involvement (Cumbria Teaching Agency Limited) also suggests potential group support, but this must be verified.

2. Financial Strength:
   The balance sheet shows fixed assets (investment property) valued at £332,121, unchanged over recent years, suggesting no depreciation charge or revaluation. Current assets are minimal (£3,183) compared to high current liabilities (£342,429), though most liabilities are long-term secured debts (£237,151 bank loan). The company has been reporting negative shareholders’ funds, worsening from -£2,079 in 2023 to -£8,835 in 2024, indicating accumulated losses or funding structure issues. The net current asset position is positive but marginal (£1,474), reflecting limited working capital buffer.

3. Cash Flow Assessment:
   Cash balances decreased from £1,420 to £473 year-over-year, and debtors increased slightly. The company’s ability to generate cash from operations is unclear due to the absence of a profit and loss account. However, net current assets remain positive, indicating short-term liquidity is currently adequate to meet immediate obligations. The secured bank loan is significant and likely requires regular servicing; ongoing rental income is critical to meet interest and principal repayments. The company appears reliant on related party funding, with £105,277 owed to the parent company, which could be a liquidity risk if support is withdrawn.

4. Monitoring Points:

• Rental income stability and any changes in occupancy or lease terms affecting cash flow.
• Debt service coverage, including interest payments on secured loans and any covenant compliance.
• Movements in net liabilities and shareholders’ funds to assess capital structure improvement or deterioration.
• Parent company funding arrangements and any changes therein.
• Creditors’ ageing and any increases in overdue liabilities.
• Filing of future accounts and confirmation statements to ensure compliance and transparency.