L & L BATES PROPERTIES LTD

Executive Summary

L & L Bates Properties Ltd is a newly formed property investment entity with significant liquidity and capital insufficiency issues. The company’s negative working capital and shareholders’ funds, combined with a large short-term loan, present high credit risk. Approval for credit facilities is not recommended until operational cash flows improve and equity support is demonstrated.

L & L BATES PROPERTIES LTD - Analysis Report

Company Number: 15076123

Analysis Date: 2025-07-19 13:06 UTC

1. Credit Opinion: DECLINE
   L & L Bates Properties Ltd is a newly incorporated property investment company with its first accounting period ending July 2024. The financials reveal significant short-term liquidity concerns: current liabilities stand at £521,534 against minimal current assets of £3,432, resulting in a net current liability position of £518,102. The company’s total net assets are negative (£3,452), indicating a weak equity base and inability to cover liabilities from existing assets. The lack of operating history and cash flow generation capability raises concerns about the company’s ability to service its debt obligations or meet ongoing commercial commitments. Without substantial capital injection or proven income streams, the company is not creditworthy at this stage.

2. Financial Strength:

• Fixed assets consist solely of investment property valued at £514,650, which is the primary asset backing the company.
• Current liabilities primarily relate to loans and other creditors falling due within one year (£521,534), substantially exceeding liquid resources.
• Shareholders' funds are negative (£3,452), highlighting accumulated losses and insufficient capital to absorb risks.
• The company's micro-entity status and exemption from audit limit financial transparency and risk assessment.
• The absence of long-term liabilities or equity beyond nominal share capital (£5) means the company’s capital structure is fragile.

3. Cash Flow Assessment:

• Cash balances are very low (£3,432), insufficient to cover near-term obligations of over £521k.
• Negative working capital (-£518,102) indicates potential liquidity distress and reliance on external funding or asset disposals to meet current debts.
• No employees or operational expenses reported, suggesting the company is not yet generating revenue.
• The absence of a profit and loss statement (due to small company exemption) limits insight into operational cash generation.
• Given the large loan balance (£480,000) maturing within one year, the company faces refinancing or repayment risk imminently.

4. Monitoring Points:

• Monitor liquidity improvements, particularly increases in cash or receivables to reduce net current liabilities.
• Track any capital injections or equity financing to strengthen shareholders’ funds and solvency.
• Observe operational performance and cash flows from property letting activities to assess debt service capacity.
• Watch loan refinance arrangements or covenant compliance to avoid default risk.
• Review director conduct and governance, given sole control by a young director with full voting rights.