OLIVE GROVE PROPERTIES LTD

Executive Summary

Olive Grove Properties Ltd shows a fragile financial position with significant working capital deficits offset by fixed property assets. While the company returned to a positive net asset position in the latest year, liquidity remains a key concern due to minimal current assets versus high short-term liabilities. Credit approval is conditional on ongoing liquidity monitoring and assurance of debt servicing capability.

OLIVE GROVE PROPERTIES LTD - Analysis Report

Company Number: 13916787

Analysis Date: 2025-07-29 20:49 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Olive Grove Properties Ltd is a micro-entity operating in real estate letting with very limited current assets (£904) and significant current liabilities (£214,960) as of 30 April 2024. The company has just returned to a positive net asset position (£2,134) from a negative position the prior two years (£7,006 deficit). While the equity has improved, the working capital remains a serious concern with net current liabilities around £214k, indicating liquidity risk. The company’s ability to service short-term obligations is weak, and their cash flow position is tight. Approval is conditional on close monitoring of liquidity and confirmation of debt servicing arrangements, possibly requiring personal guarantees or additional security.

2. Financial Strength:
   The balance sheet is heavily skewed towards fixed assets (£216,190), likely property holdings, which represent the company’s core asset base. However, current liabilities are almost equal to the value of fixed assets, and current assets are negligible, resulting in a large working capital deficit. The very low shareholders’ funds reflect a fragile equity base, though it has improved from negative to slightly positive in the latest year, possibly due to capital injection or retained earnings. The company employs 2 persons, indicating a very small operation. Overall, the financial strength is weak with high short-term liabilities relative to liquid assets, but the fixed asset base provides some collateral value.

3. Cash Flow Assessment:
   Current assets consist mainly of cash or equivalents (£904), which is insufficient to cover current liabilities (£214,960). This large mismatch highlights potential cash flow difficulties in meeting short-term debts. The absence of detailed profit and loss data limits insight into operational cash generation, but the directors’ choice not to provide the P&L statement and the micro-entity status suggest limited turnover. The company likely relies on external funding or asset sales to cover liabilities. Liquidity risk is high, and working capital management appears strained.

4. Monitoring Points:

• Quarterly review of cash flow forecasts and bank balances to ensure liquidity is maintained.
• Verification of the nature and maturity profile of current liabilities to assess refinancing risk.
• Track any capital injections or loan repayments that affect shareholders’ funds and liquidity.
• Monitor rental income stability and occupancy rates impacting revenue generation.
• Watch for any delays in statutory filings or director changes that may indicate operational stress.