KLSB INVESTMENTS LIMITED

Executive Summary

KLSB Investments Limited shows a stable fixed asset base but suffers from ongoing negative net assets and working capital deficits, limiting its liquidity and financial flexibility. The company’s ability to service debt is constrained, warranting a cautious credit approach with conditions and ongoing monitoring. While asset backing provides some security, the risk of cash flow strain should be carefully managed.

KLSB INVESTMENTS LIMITED - Analysis Report

Company Number: 13346753

Analysis Date: 2025-07-29 17:25 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   KLSB Investments Limited operates in real estate letting with minimal turnover and a micro-sized balance sheet. The company shows persistently negative net assets and net current liabilities, indicating a weak equity position and working capital deficit. However, it holds significant fixed assets (£160,000), likely property, which is a positive collateral factor. The directors are individuals with relevant experience (including an accountant), but financial resilience is currently limited. Approval could be considered with conditions such as regular monitoring, personal guarantees, or additional security to mitigate liquidity and solvency risks.

2. Financial Strength:

• Fixed assets remain stable at £160,000 over four years, representing the core asset base.
• Current assets are negligible (£1,180 in 2024), while current liabilities are substantial (£52,739 due within one year), resulting in a negative net current asset position of £-51,559.
• Long-term liabilities exceed current liabilities (£109,261), leading to total net liabilities of £-820, a slight improvement from prior years but still negative equity.
• Shareholders’ funds are negative, reflecting accumulated losses or capital deficiency.
  Overall, the balance sheet shows asset backing but weak liquidity and capital structure challenges.

3. Cash Flow Assessment:

• Low current assets and high current liabilities indicate a working capital shortage, raising concerns about the company’s ability to meet short-term obligations without refinancing or asset sales.
• The absence of significant cash or receivables implies limited operational cash flow support.
• The company’s cash flow position is weak, potentially relying on external funding or equity injections to sustain operations.

4. Monitoring Points:

• Watch liquidity ratios closely, especially current ratio and quick ratio, to detect further deterioration in short-term financial health.
• Monitor any changes in long-term debt levels or repayment schedules that could impact solvency.
• Track any capital injections or asset disposals that may improve net asset position.
• Review director conduct or changes in management, given the small leadership team and their influence.
• Assess rental income consistency and occupancy rates, as these drive cash inflows in the property letting sector.