LEGACY PROPERTY RENTALS LIMITED

Executive Summary

Legacy Property Rentals Limited carries a moderate risk profile primarily due to negative working capital and sizeable liabilities relative to its limited equity. The company’s asset base and steady equity improvement are positive factors, but liquidity constraints and debt servicing require careful monitoring. No compliance issues are apparent, but further investigation into cash flow and creditor terms is recommended for a comprehensive risk assessment.

LEGACY PROPERTY RENTALS LIMITED - Analysis Report

Company Number: 12808443

Analysis Date: 2025-07-20 17:09 UTC

1. Risk Rating: MEDIUM
   Legacy Property Rentals Limited shows moderate solvency risk due to consistently negative net current assets and significant current liabilities exceeding current assets. However, net assets remain positive, supported by substantial fixed assets (investment properties), which suggests some buffer for creditors. The company is not overdue on filings and appears compliant with regulatory requirements.

2. Key Concerns:

• Negative Net Current Assets: For several years, current liabilities (~£441k) have exceeded current assets (~£4.9k), leading to a working capital deficit around £206k. This indicates potential liquidity stress.
• Large Long-Term Debt: Creditors due after one year remain high at £441k, suggesting reliance on significant financing which may pose refinancing or servicing risks.
• Minimal Share Capital and Equity Growth: Share capital is nominal (£1), and although equity has improved from negative in 2020 to £52.5k in 2024, the level of retained profits is modest relative to liabilities and asset size.

3. Positive Indicators:

• Increasing Net Assets: The company’s net assets have grown steadily from a deficit in 2020 to positive £52.5k in 2024, reflecting accumulated retained earnings and asset appreciation.
• Substantial Investment Property Asset Base: Fixed assets (investment property) are valued at approximately £719k, which provides collateral value and underpins the business’s core activities.
• Compliance and Good Governance: No overdue accounts or confirmation statements; directors and secretary are properly appointed and active; no indications of regulatory issues or director misconduct.

4. Due Diligence Notes:

• Investigate the nature and terms of current liabilities and long-term creditors, focusing on repayment schedules, interest obligations, and covenants.
• Assess cash flow statements (not provided) to evaluate operational liquidity and the company’s ability to service short-term debts.
• Confirm valuation methods and market conditions for investment property to verify asset realizable value and impairment risks.
• Review contracts and tenant stability underpinning rental income to ascertain revenue sustainability.
• Examine any related party transactions, especially given directors’ overlapping roles and home address as company address.