Company Number: 13975789

Analysis Date: 2025-07-20 13:51 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Ecosmart Farming Ltd shows a mixed credit profile. The company holds significant fixed assets (£1.3M) but currently reports net liabilities (£54k negative shareholders’ funds) and negative working capital (net current assets -£78.7k), indicating a liquidity strain. The presence of substantial long-term secured bank loans (£770k) and other creditors (£513k) adds to the financial risk. However, the company is active, with no overdue filings and directors appear stable. Conditional approval is recommended, contingent on monitoring liquidity improvement and the company’s ability to meet short-term obligations.

2. Financial Strength:
   The balance sheet is asset-heavy, dominated by tangible fixed assets (land and machinery). However, net assets have declined from a positive £20.9k in 2023 to a negative £54.4k in 2024, reflecting accumulated losses or write-downs. The company’s gearing is high, with long-term liabilities (£1.28M) exceeding total assets less current liabilities (£1.23M), suggesting leverage risk. The small share capital (£100) indicates limited equity buffer. Overall, the financial strength is weak due to negative equity and high indebtedness despite stable fixed asset base.

3. Cash Flow Assessment:
   Cash at bank is minimal (£6.4k), insufficient to cover current liabilities (£85.1k), resulting in a negative working capital position (-£78.7k). This suggests tight liquidity and potential cash flow constraints in meeting short-term commitments. The company’s current liabilities include mortgage and tax liabilities, which require regular servicing. The negative net current assets raise concern over short-term financial resilience, necessitating close monitoring of cash flow generation or access to additional working capital facilities.

4. Monitoring Points:

• Liquidity metrics: monitor monthly cash balances and current ratio improvements.
• Debt servicing: track timely payment of mortgage, tax, and other creditors.
• Profitability trends: assess future profit and loss reports to confirm turnaround or continued losses.
• Asset revaluation or disposals: any changes to fixed assets that affect collateral value.
• Director and ownership stability: watch for changes in management or PSC that could impact governance.