NW PROPERTY LTD

Executive Summary

NW PROPERTY LTD shows asset growth and positive equity but carries high long-term debt with limited cash reserves, posing liquidity risks. Conditional approval is recommended, emphasizing the need for close cash flow monitoring and debt servicing assurance. The company’s financial leverage and modest equity base require vigilant oversight to mitigate credit risk.

NW PROPERTY LTD - Analysis Report

Company Number: 13538477

Analysis Date: 2025-07-20 17:07 UTC

1. Credit Opinion: CONDITIONAL APPROVAL NW PROPERTY LTD operates in real estate letting with a recent growth in tangible fixed assets, indicating expansion. However, the company carries significant long-term debt (£476K) relative to modest net assets (£4.1K) and very limited cash (£8.6K). The rapid increase in liabilities from £267K to £476K within one year suggests reliance on external funding, including director loans (£148K). While there is some equity growth, the current low liquidity and high gearing warrant cautious approval, subject to monitoring cash flow and debt servicing capability.

2. Financial Strength: The company's balance sheet shows a substantial increase in fixed assets, rising from £255K to £474K, likely property-related, supporting future revenue generation. Net assets remain positive but thin at £4.1K, reflecting high leverage primarily from bank loans (£329K) and director loans (£148K). Current liabilities are minimal (£1.6K), leading to positive net current assets (£7K). The equity base is modest, and the company’s capital structure is highly leveraged, which increases financial risk.

3. Cash Flow Assessment: Cash on hand is low (£8.6K) and has decreased from £15K the previous year, raising concerns about liquidity management. The company has no employees, implying low operating overheads but also limited operational activity. Net current assets are positive, but very small compared to total liabilities, indicating limited working capital cushion. The ability to service nearly half a million in long-term loans depends heavily on rental income and cash inflows, which are not disclosed here and should be scrutinized.

4. Monitoring Points:

• Regular review of cash flow statements to ensure sufficient liquidity for debt servicing.
• Tracking rental income or other revenue streams to validate operating cash inflows.
• Monitoring loan repayment schedules, especially director loans and bank loans.
• Watch for any increase in current liabilities or deterioration in net current assets.
• Assess any changes in property valuations or impairments that could affect asset backing.
• Review any director or shareholder changes that might impact governance or financial support.