ITB DEVELOPMENTS LTD

Executive Summary

ITB Developments Ltd, a recently incorporated property development company, currently shows high financial risk due to negative net assets and poor liquidity. While the company holds tangible fixed assets and remains compliant with filing requirements, its ability to meet obligations and sustain operations is questionable without further capital or improved cash flow. Further scrutiny of its debt structure and operational plans is recommended to evaluate viability.

ITB DEVELOPMENTS LTD - Analysis Report

Company Number: 14682996

Analysis Date: 2025-07-29 12:27 UTC

1. Risk Rating: HIGH
   Justification: The company exhibits significant negative net assets and shareholder funds, coupled with very low current assets relative to current liabilities. The large long-term liabilities further exacerbate solvency concerns, indicating a high risk that the company may struggle to meet its financial obligations.

2. Key Concerns:

• Negative Net Assets and Shareholder Funds: Net assets stand at approximately -£71,125, indicating the company is insolvent on a balance sheet basis.
• Poor Liquidity Position: Current assets of only £3 against current liabilities of £802 suggest immediate liquidity constraints and potential cash flow difficulties.
• Significant Long-Term Debt: Creditors due after more than one year total £364,410, mainly consisting of intercompany loans and other creditors, adding financial strain and uncertainty about repayment capacity.

3. Positive Indicators:

• Tangible Fixed Assets: The company holds fixed assets valued at £294,084, primarily land and property, which could provide security for creditors or potential liquidation value.
• Current Compliance: The company has filed its accounts and confirmation statements on time with no overdue filings or regulatory issues noted.
• Experienced Director with Relevant Industry Background: The sole director has an architecture occupation, aligning with the company's SIC code (development of building projects), suggesting operational knowledge.

4. Due Diligence Notes:

• Investigate the nature and terms of the long-term creditors, particularly the £351,810 other creditors and intercompany loans, including repayment schedules and any security held.
• Review cash flow forecasts and business plans to assess how the company intends to address its negative working capital and insolvency.
• Examine the origin of the negative retained earnings and whether these losses are expected to continue or represent initial startup costs given the recent incorporation date (2023).
• Verify any contingent liabilities or off-balance sheet obligations not disclosed in the accounts.
• Assess any related-party transactions, given the intercompany loan, to understand financial dependencies and risks.