DAVID BURR ESTATE AGENCY CO. LTD

Executive Summary

David Burr Estate Agency Co. Ltd shows an improving equity base and profitability but continues to experience working capital deficits and liquidity reduction. Credit approval is advisable with conditions focused on cash flow monitoring and management of creditor and debtor balances. The company’s long-term creditor reliance necessitates careful oversight to ensure sustained financial resilience.

DAVID BURR ESTATE AGENCY CO. LTD - Analysis Report

Company Number: 12460326

Analysis Date: 2025-07-20 12:13 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   David Burr Estate Agency Co. Ltd demonstrates positive equity growth and retained earnings improvement, reflecting profitable operations. However, recurring net current liabilities indicate working capital constraints and potential liquidity risk. The company’s substantial long-term creditor balances, especially amounts due after more than one year, require close scrutiny. Credit approval should be conditional on monitoring cash flow closely and ensuring timely management of short-term obligations.

2. Financial Strength:
   The company’s net assets have increased from £363k (2023) to £454k (2024), driven by retained earnings growth and amortization of goodwill. Fixed assets (mainly goodwill) remain significant at £1.39M, reflecting acquisition goodwill amortized over 15 years. However, net current liabilities persist at £82k, though improved from prior years, indicating current liabilities exceed current assets. The balance sheet is leveraged with creditors beyond one year of £849k, suggesting reliance on long-term creditor financing. Share capital is minimal at £200, meaning equity buffer is primarily retained earnings.

3. Cash Flow Assessment:
   Cash at bank has declined from £240k (2023) to £156k (2024), signaling reduced liquidity. Trade debtors increased to £15k, but significant debtor balances are amounts owed by group undertakings (£185k), which may not be immediately realizable. Current liabilities of £468k include corporation tax and social security, requiring prompt payment. Negative net current assets highlight working capital pressure that could affect operational cash flow. The company must manage cash conversion cycles carefully to meet short-term obligations.

4. Monitoring Points:

• Liquidity trends: Watch cash balances and net current asset position to avoid liquidity shortfalls.
• Creditor profile: Evaluate terms and repayment schedules of long-term creditors to assess refinancing risks.
• Debtor recoverability: Assess collectability of amounts due from group undertakings and trade debtors.
• Profitability continuation: Monitor retained earnings growth and impact of goodwill amortisation on earnings.
• Compliance: Ensure timely filing of accounts and confirmation statements, which is currently compliant.