KHALIL AND KANE LIMITED
Company number 05689976 · 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.
Credit Analysis: KHALIL AND KANE LIMITED
1. Credit Opinion: DECLINE
This facility must be declined. The company is currently subject to a proposal to strike off at Companies House, which indicates an active application for dissolution. Extending credit to an entity in the process of being removed from the register presents an unacceptable risk of non-repayment, as the company may cease to exist before obligations are honoured. This single factor warrants an automatic decline irrespective of financial metrics.
Beyond the structural concern, the financial position reinforces this decision. The company is balance-sheet insolvent with net liabilities of £510,576, has overdue accounts filings, and presents a deteriorating liquidity profile.
2. Financial Strength: Weak — Insolvent Position
The balance sheet has carried net liabilities continuously since 2017, deteriorating from a small surplus of £1,485 in 2016 to a deficit of over half a million pounds:
| Year | Net Assets | Trend |
|---|---|---|
| 2016 | £1,485 | Last positive year |
| 2017 | -£4,946 | Deterioration begins |
| 2018 | -£68,401 | Rapid decline |
| 2019 | -£357,442 | Significant worsening |
| 2020 | -£634,345 | Peak deficit |
| 2021 | -£583,298 | Modest improvement |
| 2022 | -£580,605 | Largely static |
| 2023 | -£560,669 | Gradual improvement |
| 2024 | -£510,576 | Continuing trend |
While the P&L reserve has improved incrementally (from -£560,769 to -£510,676, implying approximately £50K profit), the company remains deeply insolvent. Share capital stands at a nominal £100, meaning there is negligible equity cushion for creditors.
Key concern: Long-term creditors total approximately £1.69M (derived from total liabilities of £2.93M less current liabilities of £1.24M). This likely represents development financing or director-related loans. The extent of this indebtedness significantly constrains the company's capacity to service additional debt.
3. Cash Flow Assessment: Deteriorating Liquidity
Current ratio: 2.95x (£3.66M current assets / £1.24M current liabilities)
On the surface, this appears comfortable. However, the composition of current assets is deeply concerning:
- Debtors: £3,024,712 (82.6% of current assets) — up 71% from £1,767,191
- Cash: £418,816 — down 60% from £1,047,283
- Investments: £216,000 — static
The company is effectively asset-rich but cash-poor. The dramatic swing from cash to debtors raises immediate questions about collectability and whether these balances are realisable. In property development, large debtor balances can represent amounts due on development agreements, but they also carry significant risk of impairment if projects stall or counterparties default.
Cash deterioration is particularly troubling — the company has burned through £628K in cash during the year while debtors ballooned. Without visibility on debtor aging or recoverability, this working capital position cannot be relied upon.
4. Monitoring Points
If the strike-off proposal is withdrawn and the company seeks credit in future, the following require close scrutiny:
| Metric | Current Position | Risk Level | Action Required |
|---|---|---|---|
| Strike-off status | Active proposal | Critical | Confirm withdrawal before any engagement |
| Debtor quality | £3.02M (82.6% of current assets) | High | Obtain aging schedule; assess recoverability |
| Cash position | £418K and declining | High | Monitor cash conversion from debtors |
| Long-term liabilities | ~£1.69M | High | Understand terms and related-party nature |
| Accounts filing | Overdue | Medium | Ensure compliance restored |
| Net liability position | -£510K | High | Track trajectory toward solvency |
| Related party exposure | Two PSCs with 25-50% each | Medium | Assess financial support willingness |
| Employee count | 12 (up from 11) | Low | Monitor for cost pressure |
Additional red flags: - The sole director also serves as secretary — limited governance oversight - No description of principal activity was provided in the accounts, which is unusual and suggests minimal disclosure - The accounts are unaudited and abridged, reducing transparency - The £216K investment in unlisted investments has been carried at fair value with no movement — verify valuation methodology