HILLCREST PROPERTY LETS LIMITED

Executive Summary

Hillcrest Property Lets Limited demonstrates a solid asset base in investment properties but faces liquidity challenges due to current liabilities exceeding current assets by a significant margin. The company’s financial disclosures are limited and unaudited, restricting assessment of operational sustainability. Prospective investors should seek further detailed financial and operational information, including cash flow and loan terms, before concluding on risk.

HILLCREST PROPERTY LETS LIMITED - Analysis Report

Company Number: 13133216

Analysis Date: 2025-07-20 14:01 UTC

1. Risk Rating: MEDIUM

Justification: Hillcrest Property Lets Limited holds substantial investment property assets (£640,000) and has positive net assets (£60,655) as at January 2025, indicating an overall positive equity position. However, the company exhibits significant negative net current assets (-£163,921) due to current liabilities (£181,030) far exceeding current assets (£17,109), which signals liquidity risk. The large secured bank loan (£404,043) also indicates significant leverage, and the absence of an audit limits transparency.

2. Key Concerns:

• Liquidity risk: Current liabilities notably exceed current assets by a wide margin, suggesting potential difficulty in meeting short-term obligations without refinancing or asset liquidation.
• High leverage: The company carries a substantial secured bank loan of over £400k against investment properties valued at £640k, which could be a concern if property values decline or rental income is disrupted.
• Limited financial detail: The financial statements are unaudited and prepared under the small companies regime, with no statement of comprehensive income filed, limiting insight into profitability, cash flow, and operational performance.

3. Positive Indicators:

• Positive net assets and shareholders’ funds have increased modestly year-on-year, reflecting some retained earnings growth.
• Ownership and control are concentrated between two directors who are also the significant shareholders, potentially supporting aligned management and investor interests.
• The company’s core business in real estate management and letting is supported by tangible investment properties valued consistently at £640,000.

4. Due Diligence Notes:

• Investigate cash flow statements and income statements (not filed) to assess operational profitability, rental income stability, and debt servicing capacity.
• Review terms of the bank loan, including covenants, repayment schedule, and interest rates, to evaluate refinancing risks.
• Confirm the valuation methodology and market comparables for the investment properties to assess asset reliability.
• Enquire about the company’s plans for addressing the negative working capital position and whether there are any liquidity support arrangements.
• Verify the directors’ track records and any potential related party transactions given concentrated ownership.