MELMARK PROPERTY GROUP LTD

Executive Summary

Melmark Property Group Ltd operates with a highly leveraged balance sheet and persistent negative working capital, posing liquidity risks. While the company shows slight net asset improvement, its ability to meet short-term obligations depends on refinancing or capital support. Credit approval is conditional on securing adequate safeguards and ongoing financial monitoring.

MELMARK PROPERTY GROUP LTD - Analysis Report

Company Number: SC686418

Analysis Date: 2025-07-29 20:21 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Melmark Property Group Ltd is a micro private limited company engaged in real estate management and letting activities. The company exhibits very modest net asset value and persistent negative working capital, with substantial current liabilities exceeding current assets by approximately £52k as of the latest financial year. The fixed assets balance remains unchanged at £220k, suggesting no recent capital expansion or disposal. The company’s net assets have improved slightly over three years, from a negative £2.7k in 2021 to a positive £5.4k in 2024, indicating some incremental recovery but still minimal equity cushion. The directors have not flagged any audit requirements, and the company complies with its filing obligations, which supports transparency and compliance. However, the negative net current assets and the high level of short-term creditors relative to cash and receivables raise concerns about liquidity and the ability to meet short-term obligations without refinancing or additional capital. Approval is recommended only if the credit facility is limited, secured, and closely monitored, and if the company can demonstrate improved cash flow management or timely debt repayment plans.

2. Financial Strength:

• Fixed assets valued at £220,001 represent the company’s primary asset base, likely property holdings, consistent over the years.
• Current assets are minimal (£9,197) and insufficient to cover current liabilities of £61,654, resulting in a net current liability position of £52,457.
• Long-term creditors stand at £161,675, indicating significant debt financing.
• Shareholders’ funds are very low (£5,389), reflecting limited equity investment and retained earnings.
• Overall, the company shows a leveraged balance sheet with a thin equity buffer and working capital deficit, pointing to a fragile financial position.

3. Cash Flow Assessment:

• The low current assets relative to current liabilities suggest tight liquidity and potential cash flow constraints.
• The absence of significant growth in current assets over recent years signals limited improvement in operational cash inflows.
• Given the company’s real estate focus, cash flow volatility could be high due to market conditions and tenant payment cycles.
• The negative net current assets imply reliance on refinancing, capital injections, or creditor leniency to meet short-term commitments.
• Without detailed cash flow statements, caution is advised regarding the company’s ability to generate sufficient operating cash flow to service debt and operational expenses.

4. Monitoring Points:

• Track improvements or deterioration in net current assets and liquidity ratios quarterly.
• Monitor any changes in creditor terms or refinancing arrangements, especially the £161,675 long-term liabilities.
• Review any capital expenditure or asset disposals that might impact fixed asset valuations and balance sheet strength.
• Assess cash flow statements when available to identify operational cash generation versus financing dependence.
• Keep watch on any director or shareholder activity that could indicate capital injection or withdrawal.
• Monitor compliance with filing deadlines and any changes in company status or director appointments.