MARCH EAST DEVELOPMENTS LIMITED

Executive Summary

March East Developments Limited is an early-stage real estate development company with a weak financial position characterized by negative equity and working capital deficits. The company relies heavily on related party advances to fund operations, exposing it to liquidity risk. Credit approval is recommended only conditionally, with strict monitoring of cash flow, related party transactions, and market conditions.

MARCH EAST DEVELOPMENTS LIMITED - Analysis Report

Company Number: 13970139

Analysis Date: 2025-07-29 16:37 UTC

1. Credit Opinion: CONDITIONAL APPROVAL

March East Developments Limited is a newly incorporated private limited company (incorporated March 2022), operating in the real estate sector focusing on buying and selling own real estate. The company is currently showing negative net current assets and shareholders’ funds, indicating an equity deficit and working capital deficiency. This raises concerns regarding its immediate liquidity and ability to meet short-term obligations without external support. However, the company is closely linked to related entities controlled by its directors, which appear to provide financial advances interest-free, suggesting access to informal funding lines. Given the early stage of operations and the sector’s capital-intensive nature, credit approval is recommended only with conditions: requiring regular financial updates, monitoring of cash flow, and possibly guarantees or collateral to mitigate liquidity risk.

2. Financial Strength:

• The balance sheet at 29 Feb 2024 shows current assets of £501,196 against current liabilities of £511,652, resulting in net current liabilities of £10,456.
• Shareholders’ funds are negative at £10,556, worsening from a negative £2,816 in the prior year.
• The assets primarily comprise stock valued at £342,872 (land and associated acquisition costs), debtors of £155,802 (amounts owed by associated companies), and minimal cash (£2,522).
• The increase in creditors, especially amounts owed to associates (£178,786) and other creditors (£286,504), signals reliance on related party funding and trade credit.
• The absence of fixed assets and the reliance on stock (land holdings) reflects the company’s business model but also exposes it to real estate market fluctuations.
• Overall, the financial position is weak with negative equity and working capital deficits, typical for an early-stage development business investing in land acquisition.

3. Cash Flow Assessment:

• Cash at bank is minimal (£2,522), insufficient to cover immediate liabilities.
• Debtors consist mainly of amounts owed by associated companies (£155,802), which may be less liquid or subject to related party arrangements rather than market receivables.
• Current liabilities exceed current assets by about £10k, indicating liquidity pressure.
• The company depends heavily on related party advances (evidenced by £178,786 owed to an associate company and director loans) to fund operations, with no interest charged, reflecting informal liquidity support rather than independent cash generation.
• There is no income statement provided, but negative retained earnings worsening over the year indicate losses or expenses exceeding income.
• Working capital management and cash flow will be critical; any tightening of related party support or delays in land sales could severely impact liquidity.

4. Monitoring Points:

• Regular review of cash flow forecasts and working capital position to assess ongoing liquidity.
• Monitoring related party transactions to ensure they remain sustainable and transparent.
• Tracking changes in stock valuation and real estate market conditions impacting asset realizability.
• Review of any new borrowings or capital injections to strengthen equity.
• Watch for timely filing of accounts and confirmation statements to maintain compliance and early warning of distress.
• Attention to director conduct and company status for any governance or legal risks.