FAIRFAX INVESTMENTS (ACKWORTH) LTD

Executive Summary

Fairfax Investments (Ackworth) Ltd operates as a small-scale real estate investment company with a focused asset base and improving net equity driven by property revaluation gains. While leveraging is typical for the sector, the company’s negative working capital and minimal cash reserves underscore liquidity risks common among niche property investors. Overall, it occupies a niche position within the UK real estate investment market, benefiting from local market appreciation but facing challenges from interest rate pressures and sector-wide financing dynamics.

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Company Analysis

This analysis is opinion only and should not be interpreted as financial advice.

FAIRFAX INVESTMENTS (ACKWORTH) LTD - Analysis Report

Company Number: 12741600

Analysis Date: 2025-07-20 18:37 UTC

  1. Industry Classification
    Fairfax Investments (Ackworth) Ltd operates within SIC code 68100, classified as "Buying and selling of own real estate." This sector is a subset of the broader real estate activities industry, focusing on property investment, asset management, and capital appreciation through ownership and trading of property assets. Key characteristics of this sector include significant capital intensity, reliance on real estate market cycles, sensitivity to interest rates and lending conditions, and the necessity of maintaining asset valuations aligned with market realities.

  2. Relative Performance
    Fairfax Investments (Ackworth) Ltd is a small private limited company, exempt from audit under the small companies regime, with a modest share capital of £100. The company’s latest financials (year ending 28 February 2024) show investment property assets valued at £1.2 million, increased from £1.1 million the previous year, reflecting a fair value uplift of £85,550. Despite having net current liabilities of approximately £377k, the company's net assets have improved significantly to £127,359 from £37,428 a year earlier. The company maintains loans secured against its investment property totaling £650,407, consistent with prior years.

Compared to typical industry benchmarks in real estate investment companies, Fairfax’s balance sheet indicates a leveraged but asset-backed structure common in this sector. The company’s equity position is positive and improving, which is favourable, though the negative net current assets reflect short-term liquidity constraints typical of property holding companies that rely on long-term asset appreciation and financing structures rather than liquid assets. Cash holdings are minimal (£45), but this is not unusual given the sector’s capital allocation to real estate.

  1. Sector Trends Impact
    The real estate investment sector has experienced mixed dynamics recently, influenced by fluctuating property market valuations, interest rate volatility, and changing demand patterns post-pandemic. Rising interest rates have increased borrowing costs, which can pressure leveraged property investment firms, especially those with substantial debt like Fairfax. However, the company’s reported property value appreciation aligns with pockets of market resilience or recovery in specific geographic locations, potentially mitigating some refinancing risks.

Moreover, the sector is increasingly influenced by ESG considerations and the demand for sustainable property investments, which may affect future valuations and operational costs. Given Fairfax’s focus on buying and selling own real estate, its performance will also be sensitive to local market conditions in Ackworth and surrounding areas, including demand for commercial or residential properties, rental yields, and regulatory changes such as planning and tax policies.

  1. Competitive Positioning
    Fairfax Investments (Ackworth) Ltd appears to be a niche player within the real estate investment market, likely operating within a specific regional or property-type focus. It is not a market leader or large-scale institutional investor but rather a small-scale property investment entity with related party transactions within a group structure, indicating a closely held, possibly family or management-controlled business.

Strengths include a clear asset base with upward valuation trends and a positive trajectory in shareholders’ funds, suggesting effective asset management and value enhancement. The company’s leveraging strategy aligns with typical sector practices, although the negative working capital position highlights the need for careful liquidity management.

Weaknesses include limited cash reserves and reliance on group-related creditors, which may pose risks if intra-group financing conditions change. The small scale and limited diversification could expose the company to localized market risks more acutely than larger diversified competitors.



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