Company Number: 12764062

Analysis Date: 2025-07-29 18:59 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Hay Bale Properties Limited operates in the real estate sector, focusing on buying and selling its own properties. The company has shown an increase in total assets and current assets over the last year, which is positive. However, it carries significant long-term bank loan liabilities (£631k) relative to its net assets (£19.6k) and modest equity base, indicating a high leverage position. The current liabilities within one year also remain sizeable (£17.8k) but have decreased considerably compared to the prior year. While there is no evidence of overdue filings or director misconduct, the company’s ability to service its debt depends heavily on consistent cash flow from its property portfolio or refinancing options. Approval is recommended with conditions requiring ongoing monitoring of liquidity and debt servicing capacity.

2. Financial Strength:

• The company’s net assets have decreased slightly from £21.3k in 2023 to £19.6k in 2024, reflecting a thin equity cushion.
• Fixed assets (investment property) are valued at £490k, stable year-on-year, providing a solid asset base.
• The company’s long-term bank loans have increased from £440.7k to £631.2k, indicating increased borrowing and financial risk.
• The balance sheet shows a leveraged structure with debt significantly exceeding equity, which may constrain financial flexibility.

3. Cash Flow Assessment:

• Cash on hand is low at £3.7k, down from £7.8k, which could limit the company’s immediate liquidity.
• Current assets increased substantially to £178.4k, primarily due to higher debtors (£174.7k) including amounts owed by group undertakings (£127k). This concentration may pose collection risk affecting working capital.
• Current liabilities have reduced significantly to £17.8k, improving near-term liquidity pressures.
• Net current assets have improved from a negative £28.1k to a positive £160.6k, indicating better short-term financial health.
• However, the sizeable long-term debt requires consistent cash flow to meet repayments, and the company’s reliance on group debtors suggests potential exposure if these are not recovered timely.

4. Monitoring Points:

• Monitor debtor collectability closely, especially amounts due from group companies, to ensure working capital is sustained.
• Track interest coverage and debt servicing ratios to assess ongoing ability to meet bank loan obligations.
• Review any changes in investment property valuations that could affect collateral value and balance sheet strength.
• Keep watch on cash balances and short-term liabilities for liquidity management.
• Monitor director and company filings compliance to avoid regulatory risks.