GROUPE LFD LLP

Executive Summary

GROUPE LFD LLP shows positive financial development with growing net assets and improved liquidity, but it remains dependent on member loans which pose a moderate credit risk. Conditional credit approval is advised, contingent on continued financial improvement and prudent management of member debt. Ongoing monitoring of liquidity, debt structure, and operational cash flows is essential to support credit decisions going forward.

GROUPE LFD LLP - Analysis Report

Company Number: OC443768

Analysis Date: 2025-07-19 12:13 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   GROUPE LFD LLP demonstrates improving financial strength with increasing net current assets and net assets year-on-year. However, the reliance on member loans as a significant part of liabilities (£22,758) introduces some credit risk, as these loans may affect repayment priority and financial flexibility. The company is relatively young (incorporated 2022) with limited historical data, making trend analysis less robust. Approval is recommended with conditions that the company maintains or improves liquidity and reduces dependency on member loans, and that periodic financial updates are provided.

2. Financial Strength:
   The balance sheet shows net current assets improving from £4,243 in 2023 to £21,752 in 2024, indicating enhanced short-term financial health. Net assets similarly increased from £4,243 to £21,752, reflecting growth in equity attributable to members. However, the shareholders’ funds remain negative (£-1,006) due to other reserves, offset by substantial loans from members (£22,758), which are classified as debts. The company holds modest inventories (£8,620) and has increased cash balances (£13,266), supporting working capital. Overall, the financial position is improving but still reliant on member funding.

3. Cash Flow Assessment:
   Cash at bank has increased significantly from £882 to £13,266, suggesting improved liquidity. Debtors are modest (£4,055), and current liabilities remain low (£4,189), resulting in a healthy net current asset position. The company’s working capital appears sufficient to meet short-term obligations. However, the loans from members are due within one year and rank equally with unsecured creditors, which could strain cash flow if external financing is pursued or if member loans are recalled. Close monitoring of cash conversion cycles and creditor payment terms is advised.

4. Monitoring Points:

• Monitor member loans usage and any changes in repayment terms or amounts to assess risk exposure.
• Track the company’s ability to generate operational cash flow to reduce reliance on member loans.
• Watch for sustained growth in net current assets and net assets to confirm financial trajectory.
• Review any changes in inventory levels and debtor collection periods to ensure working capital efficiency.
• Verify timely filing of accounts and returns continue, as compliance affects credit reliability.