Company Number: 13131879

Analysis Date: 2025-07-20 13:40 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Millmod Properties Limited is a relatively new company incorporated in 2021, operating in the real estate sector, specifically in letting and operating own or leased real estate. The company holds investment property valued at £57,027 and tangible fixed assets of £994 as at January 2024. Despite this asset base, the company shows negative net current assets (-£15,480) and modest net assets (£2,541), reflecting limited working capital and equity base. Current liabilities have decreased from £55,000 in 2023 to £29,596 in 2024, which is a positive trend. However, the company carries non-current liabilities of £40,000, suggesting some longer-term debt commitments. Given the thin equity base and current liquidity constraints, approval for credit facilities should be conditional on strengthened working capital or additional security to mitigate risk.

2. Financial Strength:
   The balance sheet demonstrates stability in fixed assets, particularly the investment property, which has maintained its valuation year-over-year (£57,027). Equity has increased from £1,586 in 2023 to £2,541 in 2024, indicating a slight improvement in retained earnings. However, net current liabilities have worsened to -£15,480, indicating a liquidity concern. The company's gearing is relatively high considering the low equity base against creditors falling due after one year (£40,000). The small share capital (£100) and low net assets suggest limited financial cushion against adverse economic conditions.

3. Cash Flow Assessment:
   Cash on hand has improved from £9,662 in 2023 to £14,116 in 2024, which is a positive signal for short-term liquidity. Yet, the significant current liabilities of £29,596 surpass current assets, resulting in a working capital deficit. This indicates potential short-term cash flow pressure, which could impact the company’s ability to meet immediate obligations without external support or refinancing. The company’s business model in property letting typically generates steady rental income, but actual operational cash flow details are not provided, warranting cautious monitoring.

4. Monitoring Points:

• Working capital position: ongoing monitoring of current assets versus current liabilities to ensure liquidity improves.
• Debtor and creditor aging: to assess cash conversion cycle and payment practices.
• Rental income stability and occupancy rates: critical for cash flow in the real estate sector.
• Changes in investment property valuations: to detect any adverse market impact on asset base.
• Director conduct and company filings: to confirm compliance and governance standards remain sound.