NICHOLLS & SONS DEVELOPMENTS LIMITED

Executive Summary

Nicholls & Sons Developments Limited demonstrates a stable asset base with increasing net assets and compliant filings, supporting a medium risk profile. However, liquidity is modest and significant related party loans present potential financial and governance risks warranting further scrutiny. Overall, the company appears solvent but closer examination of cash flows and related party exposures is advised before investment decisions.

NICHOLLS & SONS DEVELOPMENTS LIMITED - Analysis Report

Company Number: 12613335

Analysis Date: 2025-07-29 14:27 UTC

1. Risk Rating: MEDIUM
   The company shows positive net asset growth and owns significant investment property assets, but current liabilities and intercompany loans raise potential liquidity and related-party risk concerns.

2. Key Concerns:

• Liquidity Position: While net current assets are positive at £32,635 (2024), the company’s cash balance is modest (£10,467), and there is a reliance on debtors (notably directors’ current accounts of £34,434) which may affect near-term cash flow.
• Related Party Loans & Intercompany Balances: Substantial loans to directors (£34,435 combined) and to related parties (Delamore Farms Limited and estate of Mr. C. Delamore) total over £100,000, with no fixed repayment dates. This concentration poses repayment and governance risks.
• Limited Share Capital: With only £100 share capital, the company’s equity is primarily retained earnings and reserves, which may limit external capital buffer in adverse conditions.

3. Positive Indicators:

• Asset Base & Solvency: Net assets increased from £558,850 (2023) to £567,864 (2024), supported by stable investment property valuations (£645,919) that provide a solid asset backing.
• Timely Filings & Compliance: Accounts and confirmation statements are up to date with no overdue filings, indicating good regulatory compliance.
• Operational Scale: The company maintains a small employee base (2 employees), consistent with its micro/small company status, suggesting controlled operating expenses.

4. Due Diligence Notes:

• Review the collectability and aging profile of debtor balances, particularly directors’ current accounts and related party loans, to assess liquidity risk and potential impairments.
• Examine terms and conditions of intercompany and director loans, including any security or repayment plans, to evaluate exposure to related party risk.
• Analyze cash flow statements and management forecasts (not filed) for insight into operational cash generation and ability to service current liabilities and loan obligations.
• Investigate valuation methodology and market conditions for investment properties to confirm asset stability and realizable values.
• Confirm any contingent liabilities or provisions not disclosed that might affect financial position.