GLEBE FARM DEVELOPMENTS LIMITED

Executive Summary

Glebe Farm Developments Limited has demonstrated improving financial strength with growing net assets and the elimination of bank debt, which reduces financial risk. The company’s liquidity position is stronger but still requires monitoring due to significant current liabilities. Conditional credit approval is recommended with focus on working capital management and sector risks.

GLEBE FARM DEVELOPMENTS LIMITED - Analysis Report

Company Number: 13025067

Analysis Date: 2025-07-20 17:38 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Glebe Farm Developments Limited shows improving net assets and working capital over the past few years, indicating strengthening financial health. The company has eliminated its bank loan during the latest year, improving liquidity and reducing financial risk. However, the business is still relatively young (incorporated in 2020) and operates in the development of building projects sector, which can be cyclical and sensitive to market conditions. The current liabilities remain significant relative to current assets, although net current assets have improved to £408k from £195k the previous year. Given these factors, credit approval is recommended with conditions such as ongoing monitoring of liquidity, project pipeline, and receivables collections.

2. Financial Strength:
   The company’s net assets have grown from a negative £26k in 2020 to a positive £410k in 2024, reflecting retained earnings accumulation. Shareholders’ funds stand at £410k, which is a solid base for a small private development company. Tangible fixed assets are minimal (£2.4k), typical for this industry where inventory (work in progress) dominates assets. Inventories decreased from £2.8M in 2023 to £1.4M in 2024, possibly indicating completion and sales of development projects. The elimination of bank loans (£0 in 2024 vs £1.64M in 2023) is a positive deleveraging indicator. Overall, the balance sheet shows improving equity and reduced leverage, though reliance on short-term creditors remains high.

3. Cash Flow Assessment:
   Cash balances increased from £127,916 in 2023 to £216,355 in 2024, suggesting improved liquidity. The company’s net current assets improved to £408,494, indicating better working capital management. However, current liabilities at £1.22M are still substantial versus current assets at £1.63M, highlighting a moderate liquidity risk that requires attention. Trade creditors and other creditors total nearly £1.15M, which must be managed carefully to avoid payment difficulties. Absence of bank loans reduces refinancing risk and interest burden, supporting cash flow stability.

4. Monitoring Points:

• Continued improvement in working capital, especially managing inventories and trade creditors.
• Project completion rates and sales to ensure conversion of inventories to cash.
• Cash flow trends and any future borrowing requirements.
• Market conditions in the building development sector affecting demand and pricing.
• Director management decisions and any related party transactions, as the company acts as guarantor for another related entity.