K2 PROPERTY PARTNERSHIP LLP

Executive Summary

K2 Property Partnership LLP shows a strong asset-backed balance sheet with investment property valued at £1.89 million and positive net current assets, supporting its initial creditworthiness. The LLP is newly formed with limited trading history, so cautious credit exposure is advised until positive cash flow and income streams are demonstrated. Monitoring rental income, liquidity, and asset valuations will be essential for ongoing credit assessment.

K2 PROPERTY PARTNERSHIP LLP - Analysis Report

Company Number: OC448529

Analysis Date: 2025-07-20 15:17 UTC

1. Credit Opinion: APPROVE with reservations. K2 Property Partnership LLP is a newly incorporated LLP (August 2023) with its first financial statements filed for a partial period ending March 2024. The company holds a significant investment property valued at £1.89 million, which forms the bulk of its assets. Current liabilities and member loans are modest (£10.9k and £29k respectively), and net assets stand at approximately £1.92 million. There is no profitability or cash flow history yet, and the business is in its infancy, so credit exposure should be limited and monitored. The strong asset base supports creditworthiness, but absence of trading history and income generation requires cautious short-term credit limits.

2. Financial Strength: The LLP’s balance sheet shows strong financial strength from an asset perspective. Investment property of £1.89 million represents fixed assets at fair value. Current assets are minimal (£39.8k cash), but current liabilities are low (£10.9k), resulting in positive net current assets of £29k. Total net assets amount to £1.92 million, fully supported by capital accounts and member loans. No external borrowings or bank debt are noted, which reduces financial risk. The lack of employees indicates no payroll liabilities. Overall, the structure is asset-heavy with limited liabilities, a positive indicator for credit risk.

3. Cash Flow Assessment: Cash of £39,848 on hand is adequate to cover current liabilities of £10,875, implying sufficient short-term liquidity. However, there is limited information on operating cash flows or revenue streams since the LLP only started operations in August 2023. The accounts show turnover is derived from rent receivable but do not disclose income or profit figures. Loans due to members total £28,973 and are repayable within one year, ranking pari-passu with other unsecured creditors, which could constrain cash availability if repayment is demanded. Monitoring cash conversion cycles and rent collection will be critical going forward.

4. Monitoring Points:

• Rental income stability and growth as the primary revenue source.
• Cash flow trends in subsequent reporting periods to confirm liquidity.
• Changes in investment property valuations or disposals.
• Any additional borrowings or external financing that may affect leverage.
• Timely filing of future accounts and confirmation statements.
• Member loan repayment schedules and potential impact on working capital.
• Market conditions impacting property sector and rental demand.
• Signs of operational scale-up or employee additions indicating growth.