HOPKIN ENTERPRISES LIMITED

Executive Summary

Hopkin Enterprises Limited demonstrates stable long-term asset values but faces liquidity challenges due to consistent negative working capital and significant short-term liabilities. While net assets are positive, cash reserves are tight relative to current obligations. Credit approval is possible with conditions focusing on liquidity management and close monitoring of debt servicing capability and related party exposures.

HOPKIN ENTERPRISES LIMITED - Analysis Report

Company Number: 12767239

Analysis Date: 2025-07-29 18:50 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Hopkin Enterprises Limited shows stable asset values supported by investment properties with a fair value of £251,000. However, the company exhibits persistent working capital deficits (negative net current assets) of approximately £70,000, indicating short-term liquidity pressure. The presence of substantial bank loans (£135,000) and amounts owed to participating interests (£~100,000) adds to the financial obligations. The company has positive net assets and modest equity (£35,957), showing some capital buffer but limited cash reserves relative to current liabilities. Given the company is active, with no overdue filings, and experienced directors controlling the business, credit may be extended on condition of close monitoring and possibly secured lending or covenant protections.

2. Financial Strength:

• Fixed assets are robust and stable (£251,000 investment properties).
• Shareholders’ funds have improved from negative equity in 2021 to positive £35,957 in 2024, primarily due to revaluation reserves (£43,797).
• The company carries long-term debt (£135,000 bank loans) and significant short-term liabilities (£100,413), leading to negative net current assets of -£69,770, a concern for liquidity.
• Retained earnings remain negative (-£7,940), suggesting accumulated losses that have not been fully offset by revaluation gains.
  Overall, the balance sheet reveals asset backing but weak liquidity and modest equity, requiring cautious credit exposure.

3. Cash Flow Assessment:

• Cash on hand is around £28,179, close to current liabilities but insufficient to fully cover short-term obligations.
• Debtor levels are low (£2,464), meaning limited short-term cash inflows from receivables.
• Negative working capital points to reliance on external financing or owner funds to meet immediate liabilities.
• No employees suggest low operating expenses, possibly indicating passive income from property leasing rather than trading cash flows.
• The company would benefit from monitoring cash flow forecasts and ensuring sufficient liquidity buffers to service debts when due.

4. Monitoring Points:

• Monitor working capital trends quarterly to detect worsening liquidity.
• Review adherence to debt covenants and bank loan repayment schedules.
• Track any changes in investment property valuations, as these underpin net asset value.
• Assess related party transactions (amounts owed to participating interests) for potential financial risk.
• Observe any changes in directors or PSC control that could affect governance and financial stewardship.