Company Number: 12808931

Analysis Date: 2025-07-20 16:18 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Damsell Associates Limited operates in the real estate sector with investment properties as its main asset. The company is currently active and has shown positive net asset growth from £23,648 in 2023 to £37,556 in 2024, indicating some improvement in equity. However, there is a significant negative working capital position with net current liabilities increasing to £458,043 in 2024 from £246,060 in 2023, largely due to increased short-term creditors, including substantial amounts owed to associates (£205,728) and directors’ current accounts (£181,894). These short-term liabilities far exceed current assets (£6,928), posing liquidity risk and potential cash flow constraints. The company also carries secured bank loans of £110,446, supported by a fixed charge on its property assets. Given the reliance on related party funding and weak liquidity, approval is conditional on monitoring improved working capital management and clarifying the nature and terms of related party debts.

2. Financial Strength:
   The balance sheet shows growth in fixed assets, with investment properties increasing in value from £386,843 to £606,045 during the year, reflecting asset appreciation or acquisitions. Net assets remain modest at £37,556 but have improved year over year. Share capital is minimal at £20, underscoring a small equity base. The company’s gearing is moderate to high, with long-term bank loans of £110,446 secured by property, but short-term liabilities significantly exceed current assets, weakening the liquidity position. Absence of employees reduces fixed overheads but may limit operational scalability. The company’s financial strength is supported by tangible property assets, but short-term liabilities and liquidity issues present notable concerns.

3. Cash Flow Assessment:
   Cash balance has declined from £8,239 to £3,141 over the year, while current liabilities have nearly doubled. The company’s net current liabilities position deteriorated substantially, implying potential cash flow pressure to meet short-term obligations. High amounts owed to associates and directors suggest reliance on related party financing, which may not be sustainable or could be subject to calls for repayment. The lack of disclosed income statement details restricts cash flow analysis; however, retained earnings increased by approximately £13,908, indicating profitability or revaluation gains. Liquidity remains the primary concern, with working capital deficits requiring close management.

4. Monitoring Points:

• Working capital trends and reduction of short-term creditor balances, particularly related party debts.
• Cash flow statements and operating cash generation once available.
• Continued asset valuation and potential impairment risks on investment properties.
• Any changes in loan terms or additional secured borrowing.
• Timely filing of accounts and confirmation statements.
• Directors’ conduct and governance practices given high related party exposure.