GORMANOPOLY LTD

Executive Summary

GORMANOPOLY LTD has shown some financial improvement with a return to positive net assets and increased cash balances, but the company remains highly leveraged with significant long-term debt. Credit approval is recommended on a conditional basis, requiring close monitoring of cash flow and debt servicing capability. The company’s strong asset base in real estate provides some security, but financial resilience is currently limited by thin equity and high leverage.

GORMANOPOLY LTD - Analysis Report

Company Number: 13357932

Analysis Date: 2025-07-20 17:18 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   GORMANOPOLY LTD shows signs of positive turnaround with net assets improving from a negative £6,197 in 2023 to a modest positive £26,004 in 2024. The company holds significant fixed assets (£1.55M) in real estate, which is its core business. However, the high level of long-term liabilities (£1.58M) relative to equity indicates leverage risk. The company also relies on loans including a director loan. Given the recent improvement but still thin equity buffer and high debt, credit approval should be conditional on ongoing monitoring of cash flow and debt servicing capability, plus confirmation of rental or sales income to support liabilities.

2. Financial Strength:
   Balance sheet shows £1.55M in tangible fixed assets (real estate) stable year-on-year, indicating asset base stability. Current assets are low but cash increased to £64k from £23k, improving liquidity. Current liabilities are low (£13k), but long-term liabilities remain very high at £1.58M, including bank loans and director loan. Shareholders’ funds improved to a small positive, indicating some retained earnings or profit. Overall, the company is highly leveraged but with stable asset backing; equity is minimal, so financial strength is fragile and dependent on asset values and income.

3. Cash Flow Assessment:
   Cash position improved significantly to £64k, which is positive for near-term liquidity. Net current assets increased to £51k, providing a working capital buffer. However, current liabilities are small compared to long-term debt, so the company is reliant on refinancing or operational cash flow to meet debt obligations. Absence of employees suggests low operating overheads, but also implies limited operational scale. Cash flow from property rental or sales needs to be verified to ensure ability to service debt.

4. Monitoring Points:

• Track net asset and equity levels to ensure continued improvement and avoid slipping back into negative equity.
• Monitor cash levels and net current assets for liquidity adequacy.
• Review loan repayment schedules and the company’s ability to meet interest and principal payments, especially given high long-term debt.
• Assess income streams from property holdings (rentals or disposals) to confirm sustainability of cash flow.
• Watch for any changes in property values which could impact collateral value.
• Monitor director loan terms and any related party transaction risks.