P & K PROPERTY (HUMBERSTON) LTD

Executive Summary

P & K Property (Humberston) Ltd shows a fragile financial position with negative net assets and significant working capital deficits, raising liquidity concerns. Continued trading and stable fixed assets provide some operational support, but credit exposure should be limited and subject to close monitoring of cash flow and creditor relationships. Conditional approval is recommended with safeguards to mitigate short-term risk.

P & K PROPERTY (HUMBERSTON) LTD - Analysis Report

Company Number: 12669361

Analysis Date: 2025-07-20 14:57 UTC

1. Credit Opinion: CONDITIONAL APPROVAL

P & K Property (Humberston) Ltd operates in the real estate letting sector and is a micro-sized private limited company. The company shows a marginally negative net asset position (£-1,176 as of 31 March 2024), reflecting thin equity and a slight deterioration from the prior year’s positive net assets of £211. The company has negative net current assets (£-57,349), indicating current liabilities exceed current assets, which raises liquidity concerns. However, the company is current on its filings and continues trading actively with stable fixed assets of £152,213, suggesting ongoing operations.

Given the negative working capital and marginal net liabilities, credit approval should be conditional on further information about cash flow generation and any support from shareholders or related parties. The company’s ability to meet short-term obligations is constrained, so regular monitoring and possibly shorter credit terms or guarantees are advisable.

2. Financial Strength

• The balance sheet is asset-heavy with fixed assets at £152,213, consistent over recent years.
• Current assets are minimal (£3,645), primarily cash and receivables, while current liabilities are substantial (£95,262).
• Long-term liabilities and accruals total approximately £96,040, indicating significant debt or creditor balances.
• The net asset position is marginally negative, reflecting accumulated losses or reduced reserves.
• Share capital is nominal (£100), indicating limited equity buffer.
• The company employs 2 people, consistent with a micro-entity profile.

Overall, the company has a weak equity base and a liquidity mismatch, which undermines financial strength.

3. Cash Flow Assessment

• Negative net current assets indicate potential liquidity pressure.
• Current liabilities are high relative to current assets, which could stress cash flow.
• Without detailed cash flow statements, we infer limited working capital and potential reliance on external funding or shareholder support.
• Directors and PSCs appear stable and connected to the business, which may provide informal financial backing.
• The company has no overdue filings, suggesting operational discipline.

The cash flow position is tight; monitoring receipts and payments closely is necessary to ensure ongoing solvency.

4. Monitoring Points

• Track changes in net current assets and liquidity ratios, especially current ratio and quick ratio.
• Monitor any new borrowings or creditor arrangements that may impact solvency.
• Review any shareholder loans or capital injections that may support working capital.
• Watch for timely filing of accounts and confirmation statements.
• Evaluate rental income stability and any changes in property valuations affecting fixed assets.
• Observe director conduct and any changes in management or ownership that could affect credit risk.

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