NEWLOVE HOMES LTD

Executive Summary

Newlove Homes Ltd exhibits poor financial health with negative net assets and depleted cash reserves, relying heavily on director and bank loans. The company’s weak liquidity and negative working capital position raise significant credit risk concerns. Approval of further credit facilities is not recommended without substantial improvements or guarantees.

NEWLOVE HOMES LTD - Analysis Report

Company Number: 12434097

Analysis Date: 2025-07-29 20:31 UTC

1. Credit Opinion: DECLINE
   Newlove Homes Ltd currently demonstrates weak financial health and limited repayment capacity. The company has net liabilities of £17,853 as of January 2024 and negative shareholders’ funds. The working capital position is negative, with net current liabilities of £48,583, and cash balances have depleted to zero. Significant reliance on director loans and bank debt further strains liquidity. No employees and limited operational scale suggest constrained revenue generation. Given these factors, the risk of default is high without a clear turnaround or capital injection.

2. Financial Strength:
   The company holds investment property valued at £135,000 as its only fixed asset. However, total liabilities exceed assets resulting in negative equity. Current liabilities consist mainly of director loans (£48,583) and bank loans (£104,270) maturing after one year. The absence of cash reserves and negative net current assets imply poor short-term solvency. The slight increase in bank loans and director loans year on year without a corresponding asset increase highlights ongoing financial pressure.

3. Cash Flow Assessment:
   Cash at bank declined from £5,639 in 2023 to zero in 2024, indicating cash outflows exceeding inflows. Negative net current assets suggest insufficient working capital to meet short-term obligations. The company has no employees and likely minimal operational cash generation, relying heavily on external financing. This low liquidity position restricts ability to cover immediate debts or unforeseen expenses.

4. Monitoring Points:

• Monitor changes in cash balances and working capital to detect improvement or further deterioration.
• Track bank loan repayments and director loan movements for signs of refinancing risk or increased leverage.
• Review any new capital injections or asset acquisitions that could strengthen the balance sheet.
• Assess management actions to improve profitability or restructure liabilities.
• Watch for timely filing of accounts and statutory returns to avoid compliance risks.