MCDOUGALL PROPERTY GROUP LIMITED

Executive Summary

McDougall Property Group Limited exhibits ongoing financial weakness marked by negative net assets and persistent working capital deficits. Its reliance on director loans and limited cash reserves constrain its ability to service debts and withstand economic stress. Credit approval is not recommended without substantial strengthening of liquidity and capital structure.

MCDOUGALL PROPERTY GROUP LIMITED - Analysis Report

Company Number: SC707058

Analysis Date: 2025-07-29 12:42 UTC

1. Credit Opinion: DECLINE
   McDougall Property Group Limited demonstrates a weak credit profile. The company has persistent negative net assets (£-8,924 in 2024) and negative net current assets (£-33,161), indicating ongoing balance sheet weakness and liquidity stress. The continued reliance on director loans (£76,223 owed to the director) suggests external financing support rather than internally generated cash flow. Despite owning an investment property valued at £113,125, the company's current liabilities and total borrowings exceed liquid assets, raising concerns about its ability to meet short-term obligations. The absence of profitability data (no disclosed P&L) and limited operational scale (one employee, small asset base) further reduce confidence. Given these factors, extending additional credit without significant mitigating security or guarantees is not advisable.

2. Financial Strength:
   The balance sheet reveals the company is undercapitalized with a shareholders’ deficit of nearly £9k. Fixed assets consist solely of a single investment property held at fair value (£113,125), but this is offset by substantial non-current borrowings (£88,888) and current liabilities (£77,483). Negative working capital persists year-on-year, reflecting an inability to cover short-term debts with current assets. The small share capital (£1) and retained losses indicate limited equity buffer to absorb operational or market shocks. Overall, the financial structure is fragile, with leverage concentrated in director loans and other borrowings.

3. Cash Flow Assessment:
   Cash reserves have halved from £89,124 in 2023 to £44,157 in 2024, signaling cash outflows or reduced liquidity. The company carries a high level of current liabilities (£77,483) relative to current assets (£44,322), resulting in a working capital deficit of £33,161 that constrains day-to-day operations. The minimal debtor balance (£165) indicates little trade receivables or slow collection. The company’s sole funding source appears to be the director loan account, which has reduced from £120,179 to £76,223 but still represents a significant liability. Without clear operating cash inflows or profitability, ongoing liquidity risk remains elevated.

4. Monitoring Points:

• Track changes in net current assets and liquidity ratios quarterly to detect worsening short-term solvency.
• Monitor director loan account balances for further increases which may indicate cash flow dependence on shareholder funding.
• Review any property valuation movements for impairment risk or collateral value changes.
• Watch for improvements in retained earnings or equity injections to bolster financial stability.
• Assess timely payment of current liabilities and any overdue creditor balances to avoid supplier or lender disputes.