Company Number: OC438628

Analysis Date: 2025-07-20 14:00 UTC

Credit Opinion:
CONDITIONAL APPROVAL. Ellington Properties LLP presents a stable financial position with significant asset backing in investment properties. The company is relatively new but shows a positive trajectory in net assets and equity. However, the working capital position is negative, and there is a substantial long-term bank loan secured on properties, which requires close monitoring. Approval should be contingent upon continued property market stability and confirmation of steady rental income to service debt.

Financial Strength:
The LLP’s balance sheet is anchored by investment properties valued at £1.675 million as of April 2024, with a modest increase in fair value from the prior year. Fixed assets are the primary component of total assets, indicating a capital-intensive business model. Net assets have increased to £1.04 million from £0.92 million the previous year, reflecting retained earnings or revaluation gains. Shareholders’ funds stand at £896k with additional members’ loans of £143k classified as liabilities. The company is solvent with a strong equity base relative to debt, but the gearing ratio is elevated due to bank loans totaling approximately £636k (£27k short-term + £609k long-term), secured against the properties.

Cash Flow Assessment:
Current assets are low at £11.6k, mainly cash and prepayments, while current liabilities stand at £38.9k, resulting in a negative net current asset (working capital) position of £-27.3k. This indicates some liquidity pressure in the short term, although the bank loans appear well-structured with a significant portion repayable over more than five years (£485k). The cash balance has decreased slightly but remains adequate for immediate obligations. The absence of employees suggests low operating overheads. Overall, cash flow adequacy depends heavily on rental income from investment properties and timely servicing of secured debt.

Monitoring Points:

• Track rental income streams and occupancy rates to ensure consistent cash inflows.
• Monitor the property market for valuation fluctuations that could affect asset backing.
• Review the repayment schedule of long-term loans to anticipate refinancing or repayment risks.
• Watch cash flow trends and working capital changes, ensuring liquidity is maintained.
• Keep an eye on any changes in members’ capital and drawings that might impact financial stability.