HORLEY ROAD ESTATES LTD

Executive Summary

Horley Road Estates Ltd operates with a solid fixed asset base but carries a net liability position due to significant long-term debt and minimal equity. While current assets cover short-term liabilities, the company's financial resilience depends on shareholder support and improved equity. Conditional credit approval is advised with close monitoring of equity improvements and debt servicing capability.

HORLEY ROAD ESTATES LTD - Analysis Report

Company Number: 13194978

Analysis Date: 2025-07-29 19:47 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Horley Road Estates Ltd shows a stable asset base primarily in fixed assets (£352,262), aligned with its business in real estate trading. However, the company reports net liabilities of £51,934 and negative shareholders’ funds, indicating an equity deficit. This suggests current financing relies on creditor funding beyond current asset coverage. The company has no employees and is exempt from audit, reflective of a micro-entity. Given the ongoing negative net assets and reliance on long-term creditors (£443,700), credit facilities should be extended cautiously, subject to continued support from the principal shareholder and improvement in equity position.

2. Financial Strength:

• Fixed assets remain unchanged year-on-year at £352,262, showing asset stability.
• Current assets have increased modestly to £90,917, providing some short-term liquidity.
• Current liabilities are relatively low (£50,334), resulting in positive net current assets (£40,583), which is a good indicator of working capital sufficiency.
• However, significant non-current liabilities (£443,700) create a net liability position (-£51,934). This indicates the balance sheet is leveraged heavily with debt, impairing financial strength and increasing risk.
• Share capital is minimal (£1), reflecting a limited equity buffer.

3. Cash Flow Assessment:

• Positive net current assets suggest the company can meet short-term obligations.
• No employees and low operational complexity reduce ongoing cash outflows.
• The large long-term creditor balance implies debt servicing depends on sufficient cash generation or refinancing ability, which is unverified here due to lack of P&L data or cash flow statements.
• Absence of audit and minimal reporting restricts insight into operational cash flows, requiring monitoring of liquidity closely.

4. Monitoring Points:

• Watch for improvement in net assets and shareholder equity to reduce insolvency risk.
• Monitor any changes in long-term creditor terms and ability to refinance or repay.
• Assess future filing of profit and loss accounts or cash flow statements for operational performance trends.
• Confirm continued financial support from the 75-100% shareholder, given the equity deficit.
• Observe timely filing of statutory returns and accounts to ensure compliance.