Investment Risk Analysis: Daresbury Properties Limited

1. Risk Rating: MEDIUM

Justification: The company is technically solvent with net assets of £3.57M and has a long operating history (incorporated 1963). However, persistent net current liabilities, heavy secured debt (£4.7M), and significant reliance on property revaluations for balance sheet strength create material concerns. The asset-rich, cash-poor profile is typical of property/farming entities but warrants careful monitoring of debt covenants and refinancing risk.

2. Key Concerns

a) Persistent Net Current Liabilities Current liabilities (£1.39M) substantially exceed current assets (£719K), yielding a current ratio of approximately 0.52. While improved from the prior period's deficit of £1.8M, the company remains unable to cover short-term obligations from liquid resources. Cash of £334K against current liabilities of £1.39M leaves limited headroom for operational disruptions.

b) Heavy Secured Debt and Leverage Creditors include £4,702,532 against which security has been given, likely secured against the substantial property portfolio. Long-term creditors of £4.62M, combined with provisions of £1.39M, create significant obligations against which the primary asset base is illiquid freehold property. Refinancing risk and covenant compliance should be closely examined.

c) Director Advances and Related-Party Transactions The accounts disclose loan advances to one director (The Lord Daresbury) reaching a peak balance of £2,901,160 during the period. While settled by period end, the magnitude of these advances relative to the company's size raises governance concerns. The prior year balance was £129,785, suggesting significant and variable related-party activity.

d) Revaluation-Driven Balance Sheet Improvement The revaluation reserve increased from £181,194 to £1,923,973, with tangible fixed assets rising from £6.99M to £10.05M. A substantial portion of the net asset improvement appears derived from property revaluation rather than operational performance. This creates vulnerability to property market corrections.

e) Subsidiary Underperformance Commonside Investments Limited reports negative reserves of (£410,103), though improving. This subsidiary represents a drag on group performance and may require ongoing support.

3. Positive Indicators

a) Established Corporate Lineage Incorporated in 1963 with connections to the Greenall family (The Hon. Thomas Edward Greenall as director), the company benefits from established local standing and likely extensive land/property holdings in the Cheshire area.

b) Improving Trajectory Net assets improved from £1.15M to £3.57M, net current liabilities reduced from £1.8M to £667K, and cash increased from £136K to £335K. The direction of travel is positive.

c) Regulatory Compliance Accounts and confirmation statements are filed on time with no overdue filings. The company maintains proper governance structures with a company secretary and multiple directors.

d) Diversified Asset Base The company holds farming operations, property investments, and a festival joint venture (Daresbury Festivals LLP), providing multiple revenue streams beyond pure property holding.

e) Profit Retention The P&L reserve grew from £178,819 to £854,800, indicating retained profitability during the period.

4. Due Diligence Notes

a) Stale Financial Data The most recent detailed accounts available are for the period ending 31 March 2014—over a decade old. While Companies House shows the last made-up date as 31 December 2025, the actual filed accounts content is significantly dated. Current financial position, debt levels, and trading performance cannot be reliably assessed without recent filings.

b) Director Resignation Simon Jonathan Atkinson resigned as director on 1 July 2026. As a PSC with significant influence or control, the circumstances and implications of this departure should be investigated, including any impact on lending relationships or covenants.

c) Debt Terms and Maturity Profile The nature, terms, and maturity of the £4.7M secured debt requires examination. Only £52,962 is disclosed as repayable in more than five years by instalments, suggesting the vast majority may be refinanced or have different terms not fully visible in abbreviated accounts.

d) Festival Joint Venture Performance Daresbury Festivals LLP represents an unusual diversification from farming and property. The financial performance, liabilities, and any contingent obligations of this joint venture should be examined separately.

e) Property Valuation Methodology Given the significance of revaluations to the balance sheet, the basis of valuation, frequency, and valuer credentials should be verified. Loan-to-value ratios against secured debt are critical.

f) Ultimate Controlling Entity Savernake Holdings (No 2) (PG) Limited holds 50-75% of shares and voting rights with the right to appoint/remove directors. The financial health and intentions of this parent entity materially affect Daresbury Properties' risk profile.