Company Number: 12702892

Analysis Date: 2025-07-29 20:49 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Hargate Point Ltd shows significant asset backing through investment property valued at £470,000, which supports the company's creditworthiness. However, current liabilities significantly exceed current assets, resulting in negative working capital. The company also has substantial long-term debt (£348,932) relative to net assets (£98,430), indicating financial leverage and potential liquidity risk. The director has been in place since incorporation, suggesting stable management, but the limited cash reserves and negative net current assets require close monitoring. Credit approval is conditional on maintaining adequate cash flow and servicing obligations timely.

2. Financial Strength:
   The balance sheet reveals a strong asset base dominated by investment property that has appreciated considerably in value (£470,000 in 2024 vs £120,262 in 2023). Shareholders’ funds have grown from £2,427 in 2023 to £98,430 in 2024, driven by revaluation gains. However, the company carries significant long-term debt (£348,932), which is almost 3.5 times shareholders’ equity, indicating high gearing. The small share capital (£1) is typical for a private limited company but shows reliance on external funding. Overall, financial strength is moderate but leveraged, with asset quality providing some cushion.

3. Cash Flow Assessment:
   Cash at bank has sharply declined from £5,023 (2023) to £604 (2024), and current liabilities exceed current assets by £265 in 2024, though this is a marked improvement from the previous years’ larger negative working capital positions (over £30k negative). No debtors are currently recorded, which may impact short-term liquidity. The company’s ability to meet short-term obligations is currently strained, and cash flow management is critical. The presence of substantial long-term liabilities requires consistent cash generation or refinancing capacity.

4. Monitoring Points:

• Liquidity: Monitor cash balances and net current assets closely to avoid short-term liquidity crises.
• Debt Servicing: Ensure timely interest and principal repayments on bank loans to prevent covenant breaches or default.
• Investment Property Valuation: Track property market conditions impacting the fair value of investment property, as this underpins net asset value.
• Profitability and Cash Generation: Review future income statements when available to assess operational cash flow sustainability.
• Director Conduct and Control: Maintain oversight of director’s business decisions and any changes in ownership/control.