DOUBLE TREE PROPERTIES LIMITED

Executive Summary

Double Tree Properties Limited is an active private company operating in real estate trading. While it has demonstrated growth in its investment property assets and increased shareholders’ funds, the company faces significant liquidity and solvency challenges due to large current liabilities exceeding current assets and heavy reliance on debt financing including related party loans. Timely filings indicate regulatory compliance, but investors should exercise caution and seek detailed insight into the company’s cash flows, debt servicing plans, and related party exposure before investment decisions.

DOUBLE TREE PROPERTIES LIMITED - Analysis Report

Company Number: 13748640

Analysis Date: 2025-07-29 12:58 UTC

1. Risk Rating: HIGH

Justification: The company exhibits significant liquidity and solvency concerns. Current liabilities exceed current assets by a wide margin (£540k vs £70k), resulting in negative net current assets of approximately £470k. The total debt load, including substantial long-term bank loans (£722k), is high relative to net assets (£294k). The company’s financial position indicates potential difficulties in meeting short-term obligations.

2. Key Concerns:

• Negative working capital: The company’s current liabilities substantially exceed current assets, indicating potential cash flow pressures.
• High leverage: The company carries significant debt, with long-term bank loans more than double its net assets, increasing solvency risk.
• Related party balances: The company owes over £321k to a related party (J M Clark Ltd), which may indicate dependency or financing risk that could impact operational stability if terms change.

3. Positive Indicators:

• Investment property growth: The company’s investment property asset increased from £800k to £1.56M in 2023, showing asset base growth.
• Profit retention: Retained earnings increased, contributing to a rise in shareholders’ funds from £108k to £294k, indicating some profitability or capital injection.
• Compliance: Accounts and confirmation statements are filed on time with no overdue filings, demonstrating regulatory compliance.

4. Due Diligence Notes:

• Verify the nature and terms of the related party debt to J M Clark Ltd, including repayment schedules and security arrangements.
• Assess cash flow forecasts and liquidity management plans, given the large negative net current assets position.
• Understand the company's strategy for servicing and reducing bank loans, and whether refinancing or capital injections are anticipated.
• Review any contingent liabilities or provisions that may affect solvency beyond the £73.9k provisions noted.
• Confirm the valuation methodology and market assumptions for the investment property, as this asset underpins the company's net asset value.