MIND BLOWING PROPERTIES LTD

Executive Summary

Mind Blowing Properties Ltd exhibits significant credit risk due to persistent negative equity and high indebtedness relative to assets. The company’s limited liquidity and absence of turnover raise concerns about its ability to service debt and sustain operations. Without material improvements in cash flow or capital structure, this entity is not a suitable candidate for new credit facilities at this time.

MIND BLOWING PROPERTIES LTD - Analysis Report

Company Number: 12418303

Analysis Date: 2025-07-20 19:04 UTC

1. Credit Opinion: DECLINE
   Mind Blowing Properties Ltd shows a persistent negative net asset position and shareholders’ deficit, indicating an ongoing capital deficiency. While it holds significant tangible assets (£600,200 in land and buildings), the company's liabilities, especially long-term bank loans and other creditors (£618,777), exceed its total assets, leading to a net liability position. The company has minimal cash reserves relative to its liabilities, raising concerns about its ability to meet financial obligations timely. The absence of turnover and employees, combined with negative equity and substantial debt, signals weak business resilience and financial stress. Without evidence of adequate cash flow generation or equity infusion, the risk of default on credit facilities is high.

2. Financial Strength:
   The balance sheet is heavily leveraged, with fixed assets of £600,200 fully offset by long-term liabilities of £618,777, leaving net liabilities of £8,495 as of January 2024. Shareholders’ funds remain negative at £8,595, demonstrating erosion of equity. Current liabilities are low (£1,490), but the company’s net current assets are positive but minimal (£10,082), underscoring limited working capital buffer. There is no depreciation on fixed assets, suggesting possible revaluation or non-depreciable land assets, but this does not improve solvency. Overall, the company’s financial strength is weak due to negative equity and high gearing.

3. Cash Flow Assessment:
   Cash balances are low and have only marginally increased from £8,047 to £11,572 year-on-year. Current liabilities are very small, so short-term liquidity appears sufficient for immediate obligations. However, the major concern is servicing long-term debt of over £600k with no apparent income generation or operating cash inflows. The company’s accounts do not disclose turnover or profit figures, implying limited or no operating cash flow. This raises material doubts about the sustainability of cash flow to meet debt repayments, interest, and other financing costs.

4. Monitoring Points:

• Track operating cash inflows or turnover development to assess ability to generate internal funds.
• Monitor any equity injections or debt restructuring that could alleviate negative net asset position.
• Watch for timely payment of long-term creditors and compliance with loan covenants.
• Review directors’ future strategic plans or asset disposal that could improve liquidity and solvency.
• Observe any changes in property valuations affecting fixed asset base and collateral value.