HHL PROPERTIES LTD

Executive Summary

HHL Properties Ltd demonstrates significant liquidity and leverage risks, with current liabilities far exceeding liquid assets and substantial bank debt relative to equity. While the company holds valuable tangible assets and maintains good compliance with filings, the lack of detailed profitability data and ongoing negative working capital raise concerns about its ability to meet obligations without refinancing or operational improvement. Further investigation into cash flow dynamics and debt arrangements is recommended to assess financial sustainability.

HHL PROPERTIES LTD - Analysis Report

Company Number: 13884178

Analysis Date: 2025-07-29 18:27 UTC

1. Risk Rating: HIGH
   Justification: The company exhibits significant liquidity stress with current liabilities vastly exceeding current assets, resulting in negative net current assets of approximately £82k in 2024. The presence of substantial long-term bank loans (£160k+) relative to modest net assets (£14k) and minimal cash reserves (£3k) indicates a solvency risk if cash flows do not improve.

2. Key Concerns:

• Liquidity Deficit: Negative net working capital driven by current liabilities (£85k) far exceeding current assets (£3k) could impair the company's ability to meet short-term obligations.
• Leverage Level: Heavy reliance on bank loans totaling approximately £166k, with large amounts due beyond five years, puts pressure on cash flows and interest servicing capacity.
• Lack of Profitability Disclosure & Small Scale: Absence of income statement and minimal operational scale (one employee, small exemption filing) limit visibility on operational performance and cash generation.

3. Positive Indicators:

• Asset Backing: The company holds tangible fixed assets (land & buildings) valued at £256k, providing collateral support against creditor claims.
• No Overdue Filings: Accounts and confirmation statements are up to date, suggesting compliance with statutory requirements and no immediate governance issues.
• Sole Director & PSC Stability: Single director and majority shareholder (same person) simplifies decision-making and control, which can be advantageous for swift action.

4. Due Diligence Notes:

• Investigate the nature and terms of bank loans, including interest rates, repayment schedules, and any covenants or defaults.
• Obtain or review the company's profit and loss accounts or management accounts to assess revenue streams, profitability, and cash flow generation.
• Clarify the company's business plan and strategy for improving liquidity and reducing liabilities, including potential asset disposals or refinancing plans.
• Confirm the director’s capacity and plans given limited operational scale and whether external support or additional funding is anticipated.