EKUITY FREEHOLD LIMITED

Executive Summary

Ekuity Freehold Limited holds substantial property assets with an equity cushion but exhibits notable liquidity constraints due to negative net current assets and significant secured debt. The company complies with filing requirements and appears solvent on a net asset basis; however, limited operational data and high leverage warrant careful scrutiny of cash flow and debt servicing capacity. Prospective investors should conduct further due diligence on loan terms and asset valuations to fully assess financial stability.

EKUITY FREEHOLD LIMITED - Analysis Report

Company Number: 14225619

Analysis Date: 2025-07-20 12:15 UTC

1. Risk Rating: MEDIUM

Ekuity Freehold Limited demonstrates a solid asset base with significant fixed assets in freehold land and buildings. However, the company has a substantial level of current liabilities exceeding current assets, resulting in negative net current assets. The company is relatively new (incorporated in 2022), limiting historical financial data to gauge operational stability.

2. Key Concerns:

• Liquidity Risk: Current liabilities of £224,700 far exceed current assets of £200, causing net current liabilities of £224,500. This indicates potential short-term liquidity pressures and may affect the company's ability to meet immediate obligations without refinancing or asset sales.

• Reliance on Secured Loans: The company has bank loans of £224,000 secured on its freehold property, and additional long-term creditor liabilities of £132,992. This leverage introduces solvency risk if property values decline or cash flows weaken.

• No Employees and Limited Operating Data: The company reports zero employees and minimal turnover disclosure, consistent with a holding or property management entity. This limits insight into operational sustainability and cash generation capacity.

3. Positive Indicators:

• Strong Asset Base: Tangible fixed assets valued at £900,000 comprise freehold land and buildings with a significant revaluation surplus of £550,000, supporting net asset value of £407,008.

• No Overdue Filings: The company’s accounts and confirmation statements are up to date, reflecting compliance with statutory filing requirements and regulatory obligations.

• Capital Structure: Shareholders’ funds of £414,500 indicate equity backing above net liabilities, suggesting a buffer against solvency issues.

4. Due Diligence Notes:

• Investigate the nature and terms of the secured loans, including repayment schedules and covenants, to assess refinancing risk.

• Review cash flow projections and income streams to evaluate the company’s ability to service debt and manage working capital deficits.

• Confirm the valuation methodology and market comparability for the revalued property assets to ensure balance sheet reliability.

• Clarify the company's business model and revenue sources, given the absence of employees and limited turnover data.

• Assess any contingent liabilities or obligations not captured in the provisions or creditors disclosed.