LCBG PROPERTY LTD

Executive Summary

LCBG PROPERTY LTD exhibits a highly leveraged balance sheet with negative net assets and minimal liquidity, indicating weak financial resilience. The company’s reliance on significant creditor funding to acquire fixed assets raises concerns about its ability to meet debt obligations. Due to these factors and its micro-entity scale, the credit risk is elevated, and approval for new credit facilities is not recommended without substantial financial improvement.

LCBG PROPERTY LTD - Analysis Report

Company Number: 13938874

Analysis Date: 2025-07-29 19:11 UTC

1. Credit Opinion: DECLINE
   LCBG PROPERTY LTD demonstrates a weak financial position with net liabilities (£192) as of the latest accounts. The company shows significant long-term creditor obligations (£380,229) exceeding total assets, indicating potential solvency issues. The micro-entity classification and no employees suggest a very small operational scale with limited revenue-generating capacity. The financials reveal a deterioration from prior year equity (£2,426) to a negative net asset position. This financial structure implies a high risk of default on additional credit facilities without substantial improvement in capital or cash flow.

2. Financial Strength:
   The company’s fixed assets increased materially from £56,503 in 2023 to £376,752 in 2024, likely reflecting recent property acquisitions or capital expenditure. However, this asset growth is heavily leveraged with long-term creditors rising from £58,980 to £380,229, resulting in negative shareholders’ funds and net liabilities. Current assets remain minimal (£9,312), and the company reports no employees, which points to a non-operational or asset-holding entity rather than a trading business. Overall, the balance sheet is fragile with high gearing and insufficient equity buffer.

3. Cash Flow Assessment:
   Current assets of £9,312 provide limited liquidity against current liabilities reported as £35—though this figure seems understated compared to the prior year (£58,980) and may exclude some creditor classifications. Net current assets are positive (£9,277), but working capital is marginal and likely insufficient to support operational needs or service debt comfortably. The absence of trading income and employees suggests cash flow generation is dependent on property rental or sale proceeds, which might be irregular. This low liquidity position increases short-term credit risk.

4. Monitoring Points:

• Track changes in long-term creditor balances to assess leverage trends and repayment progress.
• Monitor net asset position to detect any further erosion or improvement in equity.
• Review any incoming rental income or sale proceeds impacting cash flow and liquidity.
• Watch for updated filings and confirmation statements to ensure compliance and ongoing operation.
• Evaluate director activity and any related party transactions that may affect financial stability.