INDICA HOMES (EGLINGHAM) LTD

Executive Summary

Indica Homes (Eglingham) Ltd is currently in a precarious financial position with significant net liabilities and a severe working capital deficit, raising serious doubts about its ability to meet short-term obligations. The lack of transparency and poor liquidity suggest credit facilities should be declined until there is clear evidence of financial stabilization or capital support. Ongoing monitoring of liquidity, equity position, and director interventions will be critical if circumstances change.

INDICA HOMES (EGLINGHAM) LTD - Analysis Report

Company Number: 13252104

Analysis Date: 2025-07-20 17:48 UTC

1. Credit Opinion: DECLINE
   Indica Homes (Eglingham) Ltd shows a deteriorating financial position with significant net liabilities of £256,668 as at 31 May 2024, worsening from a negative equity position of £6,358 in 2023. The company’s current liabilities (£268,359) vastly exceed its current assets (£9,657), resulting in a severe working capital deficit. This raises substantial concerns about the company’s ability to meet short-term obligations and service any new credit facilities without additional capital injection or restructuring. The absence of an audit and limited financial disclosure (no profit and loss account included) further restricts credit risk assessment and transparency.

2. Financial Strength:
   The balance sheet reveals weak financial strength characterized by net liabilities and negative shareholders’ funds. The company's equity has eroded significantly over the last year, indicating accumulated losses or write-downs exceeding invested capital. The drastic fall in current assets from over £1 million in 2023 to under £10,000 in 2024, while current liabilities remain high, signals potential liquidity problems or asset disposals that have not improved solvency. No fixed assets or long-term creditors are reported, limiting collateral value for secured lending.

3. Cash Flow Assessment:
   The working capital position is highly negative (£-256,668), implying insufficient liquid resources to cover immediate liabilities. The absence of employees suggests either a very small operation or outsourcing, but also implies limited operational cash inflows. With current liabilities more than 27 times current assets, the company is likely reliant on external funding or shareholder support. No information on cash flows or profitability is provided, making it difficult to assess operational cash generation capacity. The company’s micro-entity status and exemption from audit reduce financial scrutiny.

4. Monitoring Points:

• Monitor future filing compliance and any changes in working capital trends.
• Watch for improvements in liquidity and reduction in current liabilities.
• Track any capital injections or restructuring that could improve net asset position.
• Keep a close eye on director’s plans for turnaround or business viability given the severe financial strain.
• Confirm absence of any related party loans or off-balance sheet liabilities that may affect credit risk.