Company Number: 13046410

Analysis Date: 2025-07-20 12:59 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Mellia Properties Ltd demonstrates ownership of investment property valued at £198,000 and holds a long-term loan of approximately £139,000 secured against this asset. However, the company shows net current liabilities of £6,813 and a very low net asset position of £1,704 as of 31 March 2024, down from £6,614 the previous year. The company continues to rely heavily on director and related party loans (£3,367 and £50,000 respectively), posing a risk to liquidity. The business is currently loss-making as evidenced by a retained earnings deficit worsening to £10,397. The director confirms going concern status based on investor funding support, but this introduces uncertainty. Credit approval is recommended only with conditions requiring regular monitoring of cash flow, repayment progress on loans, and confirmation of continued investor support.

2. Financial Strength:
   The balance sheet is dominated by a single investment property valued at £198,000, with minimal current assets (£334) and considerable liabilities totaling around £196,000 (current and long-term creditors combined). The shareholder funds are minimal and declining, indicating weak equity buffer. The company carries significant loan liabilities, including mortgage debt repayable beyond five years, which limits flexibility. The revaluation reserve of £11,101 partially offsets the retained losses but does not improve liquidity. Overall, the company's financial strength is fragile, reliant on external funding and property value stability.

3. Cash Flow Assessment:
   The company shows very limited liquid resources with cash at bank of only £242 at year-end 2024, down sharply from £1,667 the prior year. The net current liabilities position highlights a working capital deficit, indicating challenges in meeting short-term obligations from operating cash flow alone. Director's advances and related party borrowings suggest dependence on external cash injections to maintain operations. Without a clear income statement provided, it is difficult to assess operating cash flows, but the ongoing losses and depletion of cash suggest constrained liquidity and potential cash flow risk.

4. Monitoring Points:

• Cash balances and working capital position to ensure the company can meet short-term liabilities.
• Progress in reducing director and related party loans, as these represent contingent funding risks.
• Property market conditions affecting the valuation and potential refinancing of the investment property.
• Any changes in investor support or external financing arrangements that could impact going concern.
• Filing of next accounts and confirmation statement on time to maintain compliance and transparency.