Company Number: 13239261

Analysis Date: 2025-07-29 15:07 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Legendare Ltd demonstrates modest net current assets and positive shareholders' funds, indicating the company can meet short-term liabilities. However, the sharp decline in current assets, particularly trade debtors from £229,020 in 2023 to £6,378 in 2024, alongside a significant reduction in cash balances from £432,763 to £302,860, raises concerns about operational cash flow and revenue consistency. The presence of a sizeable interest-free, repayable-on-demand related-party loan (£218,892) embedded within current liabilities also affects liquidity visibility. Given these factors, credit approval is recommended with conditions focusing on improved cash flow management, monitoring debtor collections, and clarity on the related-party loan repayment strategy.

2. Financial Strength:
   The balance sheet is relatively weak but stable at £23,525 net assets as of March 2024, down from £114,986 the previous year. Shareholders’ funds mirror this decline, suggesting lower retained earnings and profitability or possible asset write-downs. The company carries minimal fixed assets (not disclosed in detail) and relies heavily on current assets. The significant reduction in current assets and net current assets from £114,986 in 2023 to £23,525 reflects a contraction in working capital, potentially signaling operational challenges or a shift in business activity. The company holds minimal share capital (£1), typical for small private companies.

3. Cash Flow Assessment:
   Cash reserves decreased by approximately £130,000 year-on-year, while debtors dramatically reduced, indicating either improved collections or reduced sales activity. Current liabilities remain high, principally due to trade creditors (£43,550) and other creditors (£241,788), with the latter including a substantial related-party loan. While net current assets are positive, the working capital buffer is slim, which may constrain the company’s ability to absorb operational shocks. The loan from a related party is interest-free and repayable on demand, offering some flexibility but also creating potential uncertainty. Overall liquidity is tight, necessitating close monitoring of cash conversion cycles.

4. Monitoring Points:

• Track monthly cash flow and debtor collections to ensure timely inflows and prevent liquidity shortfalls.
• Monitor related-party loan terms and repayment plans to assess impact on liquidity and debt servicing.
• Review profitability trends via future filings to confirm recovery or stabilization of earnings.
• Watch creditor ageing and settlement patterns to avoid supplier pressure or supply chain disruption.
• Assess management actions to rebuild working capital and improve operational efficiency.