Company Number: OC438136

Analysis Date: 2025-07-20 18:38 UTC

1. Credit Opinion:
   CONDITIONAL APPROVAL. Kendon Developments Rookstone LLP is a relatively new LLP (incorporated 2021) with significant fixed assets (land and buildings) but substantial short-term liabilities relative to current assets. The bridging loan from Avamore Capital Limited has nearly doubled within one year, increasing short-term creditor risk. While the net assets position is positive and stable, current liabilities far exceed current assets, indicating short-term liquidity risk. Approval is recommended with conditions requiring close monitoring of liquidity and loan repayment progress, and confirmation of ongoing member support or refinancing plans to cover working capital deficits.

2. Financial Strength:
   The LLP holds tangible fixed assets valued at £3.15 million (up from £2.2 million in prior year), reflecting property investments which underpin the net asset value of £1.34 million. Shareholders’ funds remain stable around £1.37 million. However, net current liabilities have increased markedly to £1.81 million due to the bridging loan doubling to £1.85 million. This signals a leveraged balance sheet with reliance on external short-term funding. Absence of depreciation on fixed assets and no employees suggest a holding or development entity rather than an operating business generating internal cash flows.

3. Cash Flow Assessment:
   Current assets total only £40,967 (cash £15,770 and debtors £25,197) against current liabilities of £1.85 million, indicating a working capital deficit of approximately £1.81 million. The LLP’s liquidity position is weak, with cash reserves insufficient to meet near-term obligations without refinancing or capital injections. The bridging loan is short-term and substantial; without clear repayment or rollover plans, this creates material refinancing risk. The entity’s cash flow is likely dependent on asset sales or further external funding rather than operating income, as there are no employees and no turnover figures reported.

4. Monitoring Points:

• Track bridging loan repayment schedule and any refinancing arrangements with Avamore Capital Limited.
• Monitor cash balances and debtor collections to assess improvements or deterioration in liquidity.
• Review any changes in fixed asset valuations or disposals which may affect collateral value.
• Observe any changes in member capital contributions or guarantees supporting liquidity.
• Watch for updates on turnover or operating income to evaluate emerging cash flows.