HGW ENTERPRISE LTD

Executive Summary

HGW Enterprise Ltd operates in real estate with a single investment property secured by a mortgage, but its financial position is weak due to negative equity and working capital deficits. Cash reserves have declined and the company relies on directors’ loans for liquidity support. Credit approval is conditional, requiring close monitoring of cash flow, property performance, and continued director backing to mitigate credit risk.

HGW ENTERPRISE LTD - Analysis Report

Company Number: 12725165

Analysis Date: 2025-07-29 16:31 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   HGW Enterprise Ltd presents as an active private limited company engaged in real estate investment and management. However, the financial position shows net current liabilities and negative shareholders’ funds, indicating weak balance sheet strength. The company holds an investment property valued at £168k with a secured interest-only mortgage of approximately £122k. Directors have provided unsecured, interest-free loans to support liquidity. The company’s ability to service debt depends heavily on the performance of the investment property and continued director support. Approval for credit facilities should be conditional on regular monitoring of cash flow and debt servicing ability, with clear covenants on liquidity and debt repayment.

2. Financial Strength:

• Total assets less current liabilities stand slightly negative at £(1,835) as of 31 March 2024, down from £(1,146) the previous year.
• Shareholders’ funds remain negative (£1,935 deficit), reflecting accumulated losses or capital erosion since incorporation.
• Fixed assets consist entirely of one investment property valued at £168,294, which has not fluctuated in value over the last reported periods.
• Current liabilities are high (£188k), mainly due to a bank loan (£122k) secured against the property and other creditors.
• The company’s gearing is significant given the modest asset base and negative equity, indicating financial vulnerability.

3. Cash Flow Assessment:

• Cash on hand reduced from £37,186 (2023) to £17,997 (2024), indicating tighter liquidity.
• Net current assets remain negative by £170,129, showing working capital deficiency and potential challenges meeting short-term obligations without additional funding or restructuring.
• Directors’ loans totaling approximately £19,632 provide some buffer but are repayable on demand and unsecured.
• The company’s income is dependent on rental income from investment property; however, detailed profit and loss data is not provided. The investment property is interest-only mortgaged, reducing immediate cash outflows but leaving principal repayment risk at term end.

4. Monitoring Points:

• Liquidity measures and cash flow trends to ensure ongoing ability to meet current liabilities, especially banking covenants around the secured loan.
• Investment property performance and valuation updates to assess collateral value and refinancing risk.
• Directors’ loan balances and any changes in their willingness or ability to provide financial support.
• Any changes in current liabilities, particularly other creditors and bank loan balances.
• Filing of annual accounts and confirmation statements on time to maintain compliance and transparency.
• Impact of external market conditions on real estate sector affecting rental income and property valuations.