Company Number: 15438153

Analysis Date: 2025-07-29 15:56 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Elemy Group Limited is a newly incorporated private limited company (January 2024) with filed accounts for the first 15-month period to March 2025. The company shows substantial net assets (£602k) primarily due to a significant investment (£1.39m) in subsidiaries. However, the company has a negative working capital position (net current assets: -£248k) and a significant amount of bank loans and related party debts (£585k secured bank loans plus £222k owed to group undertakings). While the equity base is strong, the liquidity position suggests potential short-term cash flow constraints. Credit approval is recommended only with close monitoring and assurance on the company’s ability to generate operating cash flows to service short-term liabilities.

2. Financial Strength:
   The balance sheet shows total fixed assets (investments) of £1.39m, which represent investments in group undertakings rather than tangible assets. Current assets are limited (£18.7k) compared to current liabilities (£267k), resulting in a negative working capital of -£248k. Long-term liabilities include £541k of bank loans repayable over more than one year, secured by property owned by a related company. Shareholders’ funds stand at £602k, reflecting share capital, share premium, and a small retained earnings balance. The financial structure shows reliance on external and intercompany borrowings, with an equity buffer but limited liquid assets. The company’s financial strength depends heavily on the underlying group investments and their performance.

3. Cash Flow Assessment:
   Cash on hand is low at £10.8k, with debtors at £7.9k. Current liabilities due within one year total £267k, including £44k bank loans and £223k owed to group companies. The negative net current assets indicate potential liquidity risk in meeting immediate obligations without additional funding or operational cash inflows. The company has significant secured debt (£585k) with a long-term repayment profile. The absence of an income statement in the filing limits assessment of profitability and operational cash flow generation. Management should be queried for cash flow forecasts and plans to improve liquidity to ensure timely debt servicing.

4. Monitoring Points:

• Working capital and liquidity trends in subsequent accounting periods.
• Cash flow generation from operations and intercompany transactions.
• Performance and valuation of investments in subsidiaries (fixed assets).
• Repayment schedule and covenant compliance on secured bank loans.
• Any changes in related party balances and terms, especially with group undertakings.
• Timely filing of future accounts and confirmation statements to assess ongoing compliance and financial updates.