Credit Analysis: CURZON GATE SECURITIES LIMITED

Companies House Number: 01329337 Date of Analysis: Based on accounts to 31 December 2024

1. Credit Opinion: CONDITIONAL

Reasoning: This is a long-established (1977) property-holding company with a substantial freehold asset but marginal trading activity. While the balance sheet shows shareholders' funds of £335,453, the underlying position is weaker than headline figures suggest. Retained earnings declined by £8,302 in 2024, indicating the company is loss-making on an operational basis. The freehold investment property is carried at a 1993 valuation (£323,205), meaning true asset values are uncertain and likely significantly higher—however, this also introduces potential hidden capital gains tax liabilities. Credit facilities should only be considered with specific covenants around property valuation and cash flow verification.

2. Financial Strength

Balance Sheet Composition (2024): - Fixed Assets: £326,252 (97.3% of total assets) - Freehold investment property: £323,205 (carried at pre-1993 valuation) - Fixtures & fittings: £3,047 net - Current Assets: £52,129 - Cash: £51,252 (dominant) - Debtors: £877 (minimal trade debtors) - Current Liabilities: £42,928 - Net Current Assets: £9,201 - Shareholders' Funds: £335,453

Key Concerns:

The decline in retained earnings confirms operational losses in 2024. The disappearance of trade debtors suggests either a one-off receipt or cessation of active trading. The current ratio has weakened from 1.53x to 1.21x, approaching the minimum acceptable threshold for a property company.

Property Valuation Risk: The freehold investment property at £323,205 has not been revalued since before 1993—over 30 years ago. UK commercial and residential property values have appreciated substantially since then, meaning: - The true net worth is likely significantly higher - However, any disposal would trigger substantial capital gains tax - The balance sheet does not reflect economic reality

Capital Structure: Minimal share capital (£2), with reserves comprising the vast majority of equity. The revaluation reserve at £10,307 appears stale and immaterial relative to the property value.

3. Cash Flow Assessment

Liquidity Position: - Cash represents 98.3% of current assets (£51,252 of £52,129) - Cash has grown steadily from £13,179 (2018) to £51,252 (2024) - However, current liabilities have risen from £32,543 to £42,928 (+32%)

Working Capital Analysis: - Net current assets of only £9,201 provide thin coverage - Current liabilities include: - Corporation tax: £6,108 - VAT: £3,868 - Amount due to clients: £6,600 - Directors' current accounts: £11,296 (new in 2024) - Accruals: £14,885

Cash Flow Concerns: 1. Directors' current accounts (£11,296) appeared for the first time in 2024, suggesting directors have lent money to the company—potentially indicating cash flow pressure 2. No visible revenue stream—the P&L is not filed, but declining retained earnings and minimal trade debtors suggest the company is not generating significant trading income 3. Client money (£6,600) is a persistent liability that may restrict use of cash 4. Rising accruals from £13,877 to £14,885 suggests ongoing administrative costs accumulating

Debt Service Capacity: With no long-term debt currently, the company has capacity to borrow. However, the absence of visible trading income raises questions about how any new debt service would be funded. Repayment would likely depend on property rental income (not separately disclosed) or asset realisation.

4. Monitoring Points

Critical Metrics to Watch:

1. Retained Earnings Trend – Further declines will erode the already thin working capital buffer and indicate ongoing operational losses

2. Directors' Current Accounts – The emergence of £11,296 owed to directors in 2024 warrants investigation. Is this temporary support or a sign of structural cash flow issues?

3. Property Valuation – Obtain an independent valuation before any significant credit exposure. The 30+ year-old valuation is not fit for lending decisions. Understand the true market value and potential capital gains tax liability on disposal

4. Trading Revenue – Clarify the company's income sources. Is there rental income from the investment property? What is the nature of the "development of building projects" activity given zero employees?

5. Current Ratio – Now at 1.21x, approaching minimum acceptable levels. Any increase in current liabilities without corresponding asset growth would create working capital stress

6. Client Money – The £6,600 due to clients appears in both years. Understand whether this is a regulatory requirement (client account) or a trading liability, and whether it restricts cash availability

7. Filing Compliance – Accounts are filed as "Total Exemption Full" with audit exemption. Monitor for any filing delays which could signal governance concerns

8. Related Party Transactions – With two related PSCs holding 25-50% each, monitor for transactions that may preference shareholders over creditors