D2P CAPITAL LTD

Executive Summary

D2P Capital Ltd operates in real estate trading with a growing asset base but currently exhibits marginal net liabilities and weak equity, indicating moderate financial risk. The company maintains positive working capital but has significant amounts tied up in stock and debtors, which may constrain cash flow. Credit approval is recommended with conditions requiring close monitoring of liquidity, debt servicing, and asset realisation to mitigate risk.

D2P CAPITAL LTD - Analysis Report

Company Number: 13134229

Analysis Date: 2025-07-29 20:58 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   D2P Capital Ltd shows mixed financial indicators. While it has a positive net current asset position (£4.15 million) indicating short-term liquidity, it reports marginal net liabilities (£3,141) and negative shareholders’ funds, reflecting some erosion of equity. The company’s principal business in real estate trading and development carries inherent market risks. The substantial secured bank loans backed by fixed and floating charges provide some creditor protection but also increase leverage. Given the current position, credit approval is possible with conditions requiring regular monitoring of liquidity, debt servicing, and asset valuation trends.

2. Financial Strength:
   The balance sheet reveals a significant increase in current assets from £5.62 million in 2023 to £10.04 million in 2024, largely driven by an increase in stock (property inventory) and debtors. However, current liabilities have also risen sharply to £5.90 million, mainly due to other creditors, causing a reduction in net current assets compared to 2023 (£5.50 million). Non-current liabilities (secured loans) stand at £4.15 million, slightly reduced from prior year. Net assets remain negative but improved drastically from -£94k to a near-neutral position. The company’s equity base is weak, suggesting limited buffer against losses.

3. Cash Flow Assessment:
   Cash at bank has increased to £304k from £19k, which is positive for liquidity. However, the large increase in debtors (£3.7 million) and stocks (£6 million) indicates working capital tied up in non-cash assets. The current liabilities spike, especially in other creditors, may pressure short-term cash flow. The company relies on secured loans and creditor funding, so its ability to convert inventory and receivables to cash efficiently will be critical to meet obligations. The absence of employees suggests a lean operation, but also that operational cash flow depends heavily on asset sales and debt collection.

4. Monitoring Points:

• Liquidity ratios: Current ratio and quick ratio to ensure working capital remains sufficient to cover short-term liabilities.
• Debtor aging and collectability to assess cash flow reliability.
• Inventory turnover and valuation, given significant property stock holdings.
• Debt servicing capacity, especially interest and principal repayments on secured loans.
• Equity position and any further capital injections or losses.
• Any changes in property market conditions or regulatory impacts on real estate trading.
• Director changes and governance stability, considering recent turnover in board members.