INIQUITY LTD
Company number 07305468 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Commercial Credit Assessment: INIQUITY LTD
1. Credit Opinion: CONDITIONAL
Reasoning: The company presents a mixed credit profile. While it demonstrates a 15-year unbroken trading history and consistent equity growth, the most recent financial year reveals a fundamental structural shift that introduces material uncertainty. The acquisition of £3.14M in investment properties, financed predominantly by £2.26M in long-term debt, has transformed the balance sheet leverage profile from negligible to approximately 2.1:1 debt-to-equity. Critically, the company has elected not to file a profit and loss account, making it impossible to assess debt service capability from available filings. Cash reserves are perilously thin at £9,571 against substantial debt obligations. Approval of any credit facility should be conditional upon full income statement disclosure, confirmation of rental income streams, and clarity on debt terms.
2. Financial Strength
Balance Sheet Trajectory:
| Year | Net Assets | Growth | Cash |
|---|---|---|---|
| 2018 | £196,872 | - | N/A |
| 2019 | £304,653 | +54.8% | £2,526 |
| 2020 | £325,308 | +6.8% | £441 |
| 2021 | £687,408 | +111.3% | £221,883 |
| 2022 | £841,810 | +22.5% | £463,524 |
| 2023 | £982,171 | +16.7% | £149,805 |
| 2024 | £1,014,297 | +3.3% | £6,487 |
| 2025 | £1,075,344 | +6.0% | £9,571 |
Positive indicators: - Unbroken equity growth over 8 years of available data - Net assets have grown from £196,872 to £1,075,344 — a compound annual growth rate of approximately 27% - Shareholders' funds of £1.07M provide a meaningful equity cushion - Current liabilities (£24,662) are modest relative to current assets
Concerning indicators: - Leverage transformation: Long-term liabilities surged from £2,033 (2024) to £2,264,736 (2025) — an increase of over £2.26M. This represents a fundamental shift in the capital structure. - Investment property concentration: £3,140,981 in investment properties represents 93.4% of total assets. This creates significant concentration risk and exposure to property market fluctuations. - Fair value accounting: Investment properties are measured at fair value with changes recognised in profit or loss. A portion of the reported equity growth may reflect revaluation gains rather than operational cash generation, which is less reliable for debt service. - Thin capitalisation: With only £100 in share capital, the business is almost entirely funded through retained profits and now significant debt.
Gearing ratio: Long-term debt to equity stands at approximately 2.1:1 (£2.26M / £1.07M), which is elevated for a small company in property management. This exceeds typical comfort thresholds for SME lending without additional security.
3. Cash Flow Assessment
Liquidity Position — CRITICAL CONCERN:
| Metric | 2025 | 2024 |
|---|---|---|
| Current ratio | 9.06:1 | 78.6:1 |
| Cash | £9,571 | £6,487 |
| Net current assets | £198,852 | £1,016,000 |
| Debtors | £213,943 | £233,173 |
While the current ratio appears strong, this is misleading. The current asset base has shifted dramatically:
- Work in progress of £789,436 appeared in 2025 (nil in 2024). This is unusual for a SIC 68320 (property management on a fee/contract basis) company and suggests development or construction activity. WIP is illiquid and cannot service debt.
- Cash of £9,571 is dangerously low for a company carrying £2.26M in long-term debt. This provides virtually no buffer for debt service, unexpected costs, or void periods on properties.
- Cash deterioration trend: Cash has fallen from £463,524 (2022) to £149,805 (2023) to £6,487 (2024) to £9,571 (2025). This pattern suggests the business is not generating surplus cash from operations.
Working capital concerns: - The disappearance of net current assets from £1,016,000 (2024) to £198,852 (2025) is primarily explained by the reclassification of funds into investment properties and the assumption of long-term debt - Debtors decreased marginally, which is neutral - No stock/inventory was reported, consistent with the business type
Debt service capability — UNKNOWN: The most significant gap in this assessment is the absence of a profit and loss account. Without visibility on: - Rental or fee income - Operating profit - Interest charges on the £2.26M debt - Net cash flow from operations
...it is impossible to calculate interest cover ratios or assess whether the business generates sufficient cash flow to service its obligations.
4. Monitoring Points
| Priority | Metric | Rationale |
|---|---|---|
| Critical | Full P&L disclosure | Must obtain to assess revenue, profit, and interest coverage |
| Critical | Debt terms and covenants | Need to understand interest rate, maturity, and any covenant conditions on the £2.26M long-term debt |
| Critical | Rental income confirmation | Verify that investment properties generate income sufficient to service debt |
| High | Cash position | Monitor quarterly; current £9,571 provides no margin for error |
| High | Work in progress nature | Clarify what the £789,436 WIP represents and when it will convert to cash |
| Medium | Property valuations | Investment properties at fair value — obtain basis of valuation and sensitivity to market movements |
| Medium | Director/key person risk | Single director (Mr Kandiah) with >75% ownership; consider key person insurance |
| Low | Filing compliance | Currently compliant; maintain monitoring for any overdue filings |
Recommended covenants for any facility: - Minimum cash balance of £25,000 - Debt service coverage ratio minimum 1.25:1 (once P&L obtained) - Limit on further leverage without consent - Quarterly management accounts to be provided