Company Number: 13168841

Analysis Date: 2025-07-29 20:52 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Iliad Homes Limited operates in the real estate letting sector with significant fixed assets. The company has a positive net asset position, but its current liabilities significantly exceed current assets, resulting in a large negative working capital position. The majority of current liabilities are amounts owed to group undertakings without fixed repayment dates, which somewhat mitigates immediate liquidity risk but poses a dependency on related parties. The company demonstrates growth in net assets over recent periods, indicating some financial improvement. However, the large bank loans and group borrowings require careful monitoring. Credit approval should be conditional on obtaining further clarity on group support and repayment terms of intercompany balances.

2. Financial Strength:
   The balance sheet shows total assets of approximately £22.2 million, primarily investment property valued at £21.9 million, indicating substantial tangible fixed assets. Net assets stand at £499,911 as of the latest accounts, reflecting an increase from prior years. Current liabilities of £11.3 million exceed current assets of £305,393, leading to a net current liability of over £11 million. Long-term secured bank loans are £10.38 million. The equity base is relatively small compared to liabilities, but the significant asset base provides coverage. The company relies heavily on intra-group financing, which is interest-bearing but currently lacks fixed repayment terms.

3. Cash Flow Assessment:
   Cash on hand is modest at £77,604, and debtors are £227,789, suggesting limited near-term liquidity. The negative working capital position (-£11 million) highlights a potential liquidity strain if group funding support is withdrawn. However, amounts owed to group companies (£10.6 million) are interest-bearing but without fixed repayment schedules, which provides some operational cash flow flexibility. The company must maintain strong cash flow management and ensure continued group support to meet short-term obligations.

4. Monitoring Points:

• Ongoing review of intercompany balances and confirmation of group support arrangements.
• Cash flow trends and liquidity position, ensuring no deterioration in working capital ratios.
• Interest coverage and servicing capacity on bank loans and group borrowings.
• Changes in fair value of investment property affecting asset base and net assets.
• Compliance with loan covenants related to secured bank debt.
• Directors’ management actions to address negative working capital and improve cash reserves.