HANLEY TOWN FOOTBALL CLUB LIMITED

Executive Summary

Hanley Town Football Club Limited exhibits significant financial deterioration with negative net assets and working capital deficits as of May 2024. Liquidity has weakened substantially, raising concerns about its ability to meet short-term obligations. Credit facilities are not recommended without clear evidence of financial recovery and improved cash flow management.

HANLEY TOWN FOOTBALL CLUB LIMITED - Analysis Report

Company Number: 13108206

Analysis Date: 2025-07-20 13:01 UTC

1. Credit Opinion: DECLINE
   Hanley Town Football Club Limited demonstrates a significant and recent deterioration in financial position, moving from positive net assets of £1,338 in 2023 to net liabilities of £10,181 in 2024. The sharp reduction in current assets, especially cash (from £65,723 to £13,340), coupled with current liabilities of £25,447 exceeding current assets, results in negative working capital and poor liquidity. Given these factors, the company currently lacks sufficient financial strength and cash flow to reliably service credit obligations. The absence of share capital and limited liability by guarantee structure further restricts capital raising options. Until there is evidence of a credible turnaround plan or improved financial metrics, extending credit would be high risk.

2. Financial Strength:
   The balance sheet shows weak financial health with net liabilities of over £10k and negative net current assets of £10,657 as at 31 May 2024. Fixed assets are minimal (£587), and the company is highly reliant on current assets which have declined drastically year-on-year. The company operates as a private limited by guarantee entity with no share capital, limiting equity injection possibilities. The decline from a positive net asset position to a net liability state indicates financial stress. Deferred tax liabilities also exist (£111), adding to obligations. Overall, the balance sheet signals vulnerability and insufficient buffer to absorb shocks.

3. Cash Flow Assessment:
   Cash balances have fallen sharply from £65,723 to £13,340 in one year, a 80% decline, indicating cash burn or increased outflows relative to inflows. Current liabilities remain high at £25,447, more than doubling compared to the previous year, pressuring liquidity. The negative net current assets imply inability to meet short-term obligations comfortably. Debtors remain low and stable (£200), suggesting limited receivables to convert to cash. There is no indication of significant cash-generating fixed assets. The working capital deficit and reduced cash reserves raise concerns about operational liquidity and the company’s capacity to meet ongoing liabilities.

4. Monitoring Points:

• Track quarterly cash flow statements to assess cash burn rate and liquidity improvements.
• Monitor current liabilities closely for any increases or restructuring.
• Review any changes in directors or management indicating strategic shifts.
• Watch for updated financial accounts showing return to profitability or positive net assets.
• Keep an eye on membership and sponsorship revenues if applicable, as key income drivers for sports clubs.
• Monitor compliance with filing deadlines and any emergence of overdue filings or audit requirements.