LRFAKK PROPERTIES LTD

Executive Summary

LRFAKK Properties Ltd shows a high risk profile primarily due to acute liquidity pressures and considerable secured debt relative to its asset base. While the investment property provides some security, the company’s negative working capital and minimal cash reserves raise concerns about its ability to meet short-term liabilities. Regulatory compliance is current, but further investigation into loan terms and cash flow is recommended before investment consideration.

LRFAKK PROPERTIES LTD - Analysis Report

Company Number: 13602025

Analysis Date: 2025-07-20 11:02 UTC

1. Risk Rating: HIGH
   The company exhibits significant liquidity and solvency risks due to a very low cash balance (£293) relative to substantial current liabilities (£200,755) and long-term debt (£305,789). Net current liabilities and minimal net assets indicate financial fragility.

2. Key Concerns:

• Liquidity Risk: Cash on hand is negligible compared to current liabilities, suggesting potential cash flow difficulties in meeting short-term obligations.
• High Leverage: The company has large secured loans against its sole investment property, with creditors due after more than one year of £305,789, which may strain financial flexibility.
• Negative Working Capital: Consistent negative net current assets (around -£200k) over multiple years point to persistent short-term funding gaps.

3. Positive Indicators:

• Asset Backing: The company’s principal asset is an investment property valued at £518,625, which provides some collateral coverage for secured borrowings.
• No Overdue Filings: The company is up to date with both accounts and confirmation statement filings, indicating regulatory compliance and governance discipline.
• Stable Directors: The company has three named directors with no disclosed disqualifications, which supports operational oversight.

4. Due Diligence Notes:

• Investigate the terms of the secured loans, including interest rates, repayment schedules, and any covenant restrictions.
• Evaluate the liquidity management and operational cash flow generation, including rent income from the investment property.
• Review the valuation approach and marketability of the investment property to assess its true realizable value under stressed conditions.
• Confirm the absence of contingent liabilities or off-balance sheet obligations that could further impair solvency.
• Consider the company’s business model and strategy for improving working capital and reducing reliance on director loans.