EASE PROPERTY LIMITED

Executive Summary

Ease Property Limited exhibits a strong fixed asset base but is challenged by a significant working capital deficit and high liabilities, resulting in liquidity concerns. While net assets have improved, cash flow pressures suggest credit approval should be conditional upon evidence of debt servicing ability and liquidity management. Ongoing monitoring of liquidity ratios and debt servicing is recommended to mitigate risk.

EASE PROPERTY LIMITED - Analysis Report

Company Number: 13250009

Analysis Date: 2025-07-20 18:09 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Ease Property Limited is active and operating within the real estate management sector. The company shows a positive net asset position that has increased from £53.9k in 2023 to £70.1k in 2024, indicating some net equity growth. However, the company’s current liabilities (£539k) significantly exceed current assets (£54.5k), producing a negative working capital position of approximately -£291k. This suggests liquidity strain and potential difficulty in meeting short-term obligations. The substantial non-current liabilities (£539k) also weigh heavily on the balance sheet, although the tangible fixed assets (£900k) appear stable and likely provide collateral value. Given this, credit approval should be conditional on further assurances regarding the company’s ability to service liabilities, including cash flow forecasts or additional security.

2. Financial Strength:
   The balance sheet shows a solid asset base dominated by freehold land and buildings valued at £892.5k, with modest additions in fixtures and fittings. Net assets have improved steadily from £16.4k in 2021 to £70.1k in 2024, reflecting retained earnings accumulation. However, the company carries significant liabilities, particularly current liabilities which are approximately ten times the current assets, indicating tight liquidity. The level of gearing (liabilities relative to equity) is high, raising concerns about financial flexibility. The company’s equity is minimal (£1 share capital) and the majority of funds are retained profits. Overall, while asset-backed, the company’s financial strength is constrained by its liability structure and working capital deficit.

3. Cash Flow Assessment:
   Cash balances have decreased from £78.6k in 2023 to £51.3k in 2024, a notable reduction. Debtors are low (£3.3k), so limited short-term receivables are available to support liquidity. The negative net current assets indicate the company may face challenges meeting short-term commitments without refinancing or selling assets. The heavy current liabilities require careful management of cash inflows and outflows. There is no detailed profit and loss data to assess operational cash generation, but the negative working capital and reduction in cash suggest potential liquidity pressure. Monitoring cash flow projections and covenant compliance will be critical.

4. Monitoring Points:

• Liquidity ratios: current ratio and quick ratio to track improvement or deterioration in working capital.
• Debt servicing capacity: interest coverage and principal repayments ability from operating cash flows.
• Asset valuations and impairment risk on freehold property, given market conditions in real estate.
• Director’s future plans to address the working capital deficit, including equity injections or refinancing.
• Timely filing of accounts and confirmations to maintain regulatory compliance.
• Any changes in related party transactions or liabilities that may affect solvency.