Company Number: 13041949

Analysis Date: 2025-07-20 13:00 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Harrigate Properties Limited shows growth in fixed assets, particularly investment property, indicating business expansion. However, the company has persistently negative net current assets (working capital) with a significant current liabilities burden exceeding current assets by £852k as of 30 November 2024. The company relies heavily on related party borrowings and has increased overall borrowings substantially over the year. Without clear evidence of sufficient cash flow generation or liquidity buffers, the company’s ability to service short-term debts and meet obligations is uncertain. Approval for credit facilities should be conditional on obtaining stronger cash flow forecasts, confirmation of related party support continuing, and possibly securing additional collateral or guarantees.

2. Financial Strength
   The company’s net assets improved to £154k from £105k the prior year, mainly due to an increase in fair value of investment properties from £629k to £1.23M. Shareholder funds remain modest (£154k) with only £2 in share capital, indicating limited equity injection. The substantial increase in borrowings (current and non-current) to over £320k reflects increased leverage, with related party loans forming a significant part. The negative working capital position is a concern, as current liabilities more than double current assets. While fixed assets are growing, the balance sheet shows liquidity stress and dependence on external and related party funding. The company remains small-scale but is actively investing in property assets.

3. Cash Flow Assessment
   Cash held at year-end is zero (down from £4.3k), and net current liabilities stand at £852k, indicating likely cash flow constraints. Debtors are minimal and mostly non-trade related (prepayments and other debtors £14k). Current borrowings increased sharply, including bank overdrafts of £29k and other borrowings. The company appears to be financing operations and asset acquisitions through borrowings rather than internal cash generation. Without access to profit and loss data, cash flow from operations cannot be confirmed, but the working capital deficit and increased debt suggest cash flow coverage of liabilities is weak. Monitoring liquidity closely is essential.

4. Monitoring Points

• Working capital and liquidity position: watch for improvement or further deterioration in net current assets.
• Borrowing levels, especially related party loans and banking facilities: confirm ongoing support and repayment terms.
• Investment property valuations: track volatility and impairment risks that could affect asset backing.
• Cash flow generation: obtain management forecasts and P&L data to assess profitability and debt servicing capacity.
• Directors and management conduct: no adverse records found; maintain oversight on governance.