LIBBYS PATCH LTD

Executive Summary

Libbys Patch Ltd maintains a positive net asset base supported by fixed assets but faces significant short-term liquidity challenges due to high current liabilities greatly exceeding current assets. The company’s financial position warrants a conditional credit approval with close monitoring of working capital and debt servicing capacity. Credit extension should be cautiously structured to mitigate risk associated with limited cash flow visibility and concentrated management control.

LIBBYS PATCH LTD - Analysis Report

Company Number: 13129893

Analysis Date: 2025-07-29 20:08 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Libbys Patch Ltd is a micro private limited company in the agricultural sector specializing in growing non-perennial crops. The company is active with no overdue filings and has a single director and significant controller, Mrs. Bethan Jane Thornicroft, who maintains full control. While the company shows a positive net asset position, the large and increasing net current liabilities and long-term creditors indicate liquidity pressure. The company’s ability to meet short-term obligations is constrained, suggesting that credit exposure should be limited or structured with covenants to monitor working capital closely.

2. Financial Strength:

• Fixed assets have increased from £210k to £233k over the last year, indicating investment or capitalisation consistent with asset-based operations.
• Net assets have decreased from £82.7k to £62.3k due to increased long-term liabilities, reducing equity cushions.
• The rise in creditors due after one year (£40.3k) for the current year introduces medium-term financial commitments that must be serviced.
• Share capital remains minimal (£100), showing limited equity funding beyond retained earnings.
  Overall, the balance sheet shows moderate financial strength supported by tangible fixed assets but is weakened by substantial current liabilities exceeding current assets by £130k.

3. Cash Flow Assessment:

• Current assets are minimal (£5.5k) compared to current liabilities (£135.5k), resulting in a significant negative working capital position.
• This indicates potential cash flow difficulties in meeting short-term debts without additional financing or asset liquidation.
• The absence of employees and reliance on a single director may reduce overhead but also limits operational scalability.
• Lack of audit and limited disclosures restrict insight into profitability or cash generation, increasing risk.
• Liquidity management is a key concern; any credit facilities should be structured with short-term monitoring and possibly supported by personal guarantees or asset-backed security.

4. Monitoring Points:

• Track changes in working capital, especially current liabilities relative to current assets.
• Monitor repayment or restructuring of long-term creditors to avoid liquidity crunch.
• Review future filings for evidence of profit generation or cash flow improvement.
• Observe any changes in director or ownership that might affect governance or financial stewardship.
• Keep watch on business growth or diversification to improve revenue streams and reduce reliance on fixed assets.