HOLBROOK'S REFRIGERATION LTD

Executive Summary

Holbrook's Refrigeration Ltd shows an improving but still fragile financial position with negative working capital and depleted cash reserves, which constrain short-term liquidity. The company’s net assets have increased, indicating some equity growth, but close attention is needed on cash flow and debtor management. Conditional credit approval is recommended with rigorous ongoing monitoring of liquidity and profitability metrics.

HOLBROOK'S REFRIGERATION LTD - Analysis Report

Company Number: 13639450

Analysis Date: 2025-07-29 20:04 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Holbrook's Refrigeration Ltd is a young, small private limited company active since 2021, engaged in transportation support activities. The company shows improving net assets from £4,384 in 2023 to £7,594 in 2024, indicating some strengthening of its equity base. However, it still shows negative net current assets (working capital) of £-3,121 in 2024, though improved from a much higher deficit in prior years. The current liabilities exceed current assets, signaling potential short-term liquidity pressure. The director owns 75-100% of shares and has strong control, which can be positive for management continuity but also concentrates risk. There is no evidence of audit or disclosed profit and loss, so profitability and cash flow trends are unclear. Given these factors, credit approval can be granted but with conditions on monitoring liquidity and working capital closely.

2. Financial Strength:

• Net assets increased by 73% from £4,384 (2023) to £7,594 (2024), showing improving equity and potential retention of profits.
• Tangible fixed assets declined slightly from £16,110 to £13,228, reflecting depreciation exceeding new asset purchases.
• Current liabilities remain higher than current assets (£14,707 vs. £11,586), resulting in negative net current assets but the deficit has narrowed substantially from £-9,759 in 2023 to £-3,121 in 2024.
• Provisions for liabilities increased to £2,513 in 2024 from £1,967 in 2023, which may reflect anticipated obligations.
  Overall, the balance sheet shows improving but still fragile financial strength, with a thin equity buffer and working capital deficits.

3. Cash Flow Assessment:

• Cash at bank dropped to zero in 2024 from £5,645 in 2023, which raises concerns about immediate liquidity and the ability to meet short-term obligations.
• Debtors decreased from £17,551 in 2023 to £11,586 in 2024, improving asset liquidity but still significant amounts are tied up in receivables.
• Current liabilities reduced substantially from £32,955 (2023) to £14,707 (2024), which helps ease short-term pressure but the company still faces a working capital deficit.
• Bank loans and overdrafts stand at £976 in 2024, indicating some reliance on external financing.
  The company’s liquidity position requires close monitoring as cash reserves are depleted and working capital is negative, though improving.

4. Monitoring Points:

• Liquidity and cash flow management: Watch for improvements in cash balances and reduction in working capital deficits.
• Debtor collection efficiency: Monitor aging of trade debtors to ensure timely collections.
• Profitability trends: Obtain profit and loss data to assess operating performance and ability to generate internal cash.
• Provisions and liabilities: Review any changes in provisions which could impact future cash requirements.
• Director and ownership stability: Given the substantial control by a single individual, monitor governance and any changes in management or ownership that could affect credit risk.