MONACELLE LIMITED

Executive Summary

Monacelle Limited holds significant fixed assets but operates with minimal equity and high leverage, resulting in liquidity and solvency risks. While the company is active with no overdue filings, its working capital position is weak, necessitating careful cash flow monitoring and potential credit conditions. Approval is recommended only with conditions ensuring ongoing financial oversight and risk mitigation.

MONACELLE LIMITED - Analysis Report

Company Number: 13556677

Analysis Date: 2025-07-29 18:57 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Monacelle Limited demonstrates ownership and control by a single director with a clear governance structure. The company operates in real estate letting and trading, holding substantial fixed assets (£860k+). However, the balance sheet reveals a tight equity position with net assets marginally positive (£18.7k), and a significant level of long-term creditors (£438.8k) relative to net assets. The current liabilities have decreased recently but remain high (£469.5k), leading to negative net current assets (-£402.7k), indicating liquidity constraints. Given these factors, credit approval should be conditional on monitoring liquidity closely and obtaining more detailed cash flow forecasts or security arrangements.

2. Financial Strength:
   The company has substantial fixed assets consistent with its real estate activity, stable around £860k over the last two years. However, the net asset base is very thin, increasing only slightly from £14.2k in 2023 to £18.7k in 2024. The high level of creditors due after one year (£438.8k) compared to net assets indicates significant leverage. The reduction in long-term liabilities from £638.8k to £438.8k this year suggests some debt repayment or restructuring, which is positive. The equity cushions remain minimal, implying limited buffer against losses or asset devaluation.

3. Cash Flow Assessment:
   Current assets have increased from £45.7k to £66.8k, but current liabilities also rose substantially year-on-year (£253.7k in 2023 reported previously vs £469.5k in 2024 as per latest filings—note slight discrepancy in prior year current liabilities figure). The net current assets are negative and have worsened, indicating working capital deficiency. This suggests the company may face short-term liquidity challenges and may rely heavily on creditor funding or refinancing. The average employee count is minimal, keeping overhead low. Cash flow adequacy to meet short-term obligations should be verified, and covenant compliance reviewed if external debt is involved.

4. Monitoring Points:

• Liquidity metrics: Current ratio and quick ratio trends to assess short-term payment ability
• Debt servicing capacity: Interest cover and principal repayment schedules on long-term liabilities
• Asset valuation: Monitoring fair value of fixed assets in real estate market conditions
• Profitability and retained earnings: To track equity growth and internal funding potential
• Director related transactions or guarantees, given single-person control
• Timely filing of accounts and returns to ensure transparency and compliance