Company Number: 13116650

Analysis Date: 2025-07-20 11:52 UTC

Credit Opinion:
CONDITIONAL APPROVAL. Farrant Group Limited is an active, small private company operating in the public relations and communications sector. The company has reported net liabilities and an equity deficit for the last two years, indicating financial weakness. However, it remains operational with ongoing director support and no overdue statutory filings. The business depends heavily on the financial backing of its principal director and sole significant shareholder, Mr. Michael Dudley Farrant. The credit approval is conditional on continued director support and close monitoring of liquidity and creditor pressures.

Financial Strength:
The balance sheet shows a deterioration from net assets of £916k in 2022 to net liabilities of £127k in 2025. Current liabilities consistently exceed current assets, resulting in negative working capital of approximately £131k for 2025, worsening from £108k negative in the prior year. Fixed assets are minimal (£4k), reflecting limited tangible investment. The company’s equity position is weak, with an accumulated loss reflected in the profit and loss reserve of -£127k. The company’s capital base is nominal (£100), indicating limited buffer for absorbing losses. Related party loans are interest-free and repayable on demand, which provides some flexibility but also indicates reliance on director funding.

Cash Flow Assessment:
Cash balances have declined from £1.45m in 2022 to £213k in 2025, signaling significant cash burn over three years. Trade debtors decreased but still remain substantial (£225k), and the collection period should be monitored. Current liabilities are sizeable (£656k), including trade creditors and accruals, which may pressure liquidity. The company lacks a statement of cash flows (exempt as a small company), but the available data suggest tight liquidity and reliance on ongoing director funding to meet short-term obligations. The company’s going concern note confirms dependence on director support, with no assurance that this will continue indefinitely.

Monitoring Points:

• Director and related party financial support continuation and terms.
• Cash conversion cycle, specifically debtor collections versus creditor payments.
• Trends in working capital and net current liabilities.
• Operating performance and ability to return to profitability to rebuild equity.
• Any changes in related party balances or loan conditions.
• Compliance with filing deadlines and any changes in director status or conduct.