GMS PROPERTY & DEVELOPMENTS LTD

Executive Summary

GMS Property & Developments Ltd currently exhibits poor financial health characterized by negative net assets, significant working capital deficits, and liquidity challenges. The company's reliance on related party funding and absence of operational cash flow undermine its creditworthiness. Given these factors, credit facilities are not recommended at this time without substantial improvement in financial stability and cash flow generation.

GMS PROPERTY & DEVELOPMENTS LTD - Analysis Report

Company Number: 12741690

Analysis Date: 2025-07-29 19:22 UTC

1. Credit Opinion: DECLINE
   GMS Property & Developments Ltd demonstrates significant financial distress marked by recurring net liabilities, a negative net asset position (£-39,003 as at July 2024), and sharply deteriorating working capital (net current liabilities of £-225,927 in 2024 vs net current assets previously). The company’s inability to maintain positive equity and working capital undermines its capacity to meet short-term obligations reliably. Additionally, a substantial inter-related company loan (£200,647) and directors' current accounts (£34,219) within current liabilities indicate dependence on related parties rather than external cash flows. These factors collectively point to a heightened credit risk and poor repayment capacity.

2. Financial Strength:
   The balance sheet reveals a weak financial position. Although the company holds investment property valued at £186,924, this asset base is insufficient to offset current liabilities, resulting in a negative total assets less current liabilities figure (£-39,003). The absence of long-term loans in 2024 compared to a prior £282,810 non-instalment loan in 2023 may reflect restructuring but has not improved net liabilities. Negative retained earnings and shareholders’ deficit confirm accumulated losses with no equity buffer. Lack of tangible equity and negative net assets highlight insolvency concerns on a going-concern basis.

3. Cash Flow Assessment:
   Cash reserves have plummeted from £52,769 in 2023 to £11,639 in 2024, signaling liquidity strain. The company’s current liabilities of £237,566 are heavily skewed towards inter-company loans and directors’ accounts rather than third-party trade creditors, suggesting reliance on connected parties for funding. The negative net working capital position indicates the company cannot internally fund its operational or debt service needs without external support. No employees are reported, implying limited operational activity and potential cash flow generation challenges.

4. Monitoring Points:

• Track quarterly cash balances and liquidity trends to detect worsening cash flow stress.
• Monitor movements in inter-related company loans and directors’ accounts to assess funding reliance and potential repayment obligations.
• Watch for further deterioration or improvement in net asset position in subsequent filings.
• Review any changes in investment property valuation as it underpins asset coverage.
• Observe timely filing of accounts and confirmation statement to assess management discipline and compliance.