MICHAEL MCARTHUR PROPERTIES LLP

Executive Summary

Michael McArthur Properties LLP shows a stable but declining financial position, with positive working capital and cash balances offset by a reduction in net assets and a reported loss. The company appears compliant with filing obligations but relies significantly on member loans, which may pose liquidity risks. Further investigation into operational performance and member loan arrangements is recommended to fully assess financial stability.

MICHAEL MCARTHUR PROPERTIES LLP - Analysis Report

Company Number: OC431940

Analysis Date: 2025-07-29 14:53 UTC

1. Risk Rating: MEDIUM
   The company demonstrates a positive net asset position and adequate working capital, but there is a noticeable decline in net assets and current assets compared to the previous year, coupled with a reported loss for the year. The reliance on member loans classified as liabilities also introduces some financial risk.

2. Key Concerns:

• Declining Net Assets: The net assets decreased from £367,856 in 2023 to £258,836 in 2024, indicating potential erosion of capital.
• Reduction in Current Assets and Debtors: Current assets fell significantly from £443,918 to £322,721, with trade debtors dropping sharply, which may signal weakening revenue or collection issues.
• Loss Reported and Member Loan Dependence: The LLP reported a loss of £55,345 and maintains substantial loans from members (£258,836), which are repayable within one year and rank equally with ordinary creditors, potentially impacting liquidity if members demand repayment.

3. Positive Indicators:

• Positive Net Current Assets: The LLP maintains a healthy level of net current assets (£224,129), suggesting it can meet short-term obligations.
• Cash Position Improved: Cash at bank increased from £102,905 to £136,690, which supports operational liquidity.
• Compliance and Filing: There are no overdue filings; accounts and confirmation statements are up to date, indicating good regulatory compliance.
• No Audit Requirement: The LLP is classified as small and has complied with the exemption from audit, reducing administrative burden.

4. Due Diligence Notes:

• Investigate the cause of the significant decline in debtors and current assets to assess if this is due to reduced sales, write-offs, or other operational issues.
• Review the sustainability of member loans and the terms of their repayment, including any risk of calls for repayment that could strain liquidity.
• Examine the operational performance leading to the loss and the LLP’s plans for returning to profitability.
• Confirm the valuation and impairment policy for tangible and intangible assets to ensure asset values are fairly stated.
• Assess the LLP’s farming activities (principal business) and any sector-specific risks that might impact financial stability.