PALM RE INVESTMENTS LIMITED
Executive Summary
PALM RE INVESTMENTS LIMITED holds significant fixed assets but faces substantial short-term liquidity challenges due to large current liabilities exceeding current assets. While the latest financial year shows improved turnover and profitability, cash flow constraints require conditional credit approval with ongoing monitoring. The company’s net asset base remains solid, but working capital management will be critical to sustaining financial health.
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This analysis is opinion only and should not be interpreted as financial advice.
PALM RE INVESTMENTS LIMITED - Analysis Report
Credit Opinion: CONDITIONAL APPROVAL PALM RE INVESTMENTS LIMITED shows ownership of substantial fixed assets (£2.01M) indicating significant investment in real estate, consistent with its primary SIC code (68100). However, the company displays a recurring and large current liabilities position (£822K) far exceeding current assets, resulting in a negative net working capital (-£773K). This liquidity strain raises concerns over short-term payment capability despite positive net assets (£860K). The recent increase in turnover to £34K from negligible prior levels and a profit in the latest year are positive signs but remain small relative to liabilities. Therefore, credit approval is conditional upon enhanced monitoring and possibly securing additional guarantees or collateral to mitigate short-term liquidity risks.
Financial Strength: The balance sheet reflects a strong asset base dominated by fixed assets (primarily property) valued consistently at £2.01M over the past three years. Shareholders’ funds are stable and rising slightly (£836K in 2024 to £860K in 2025), evidencing retained earnings accumulation and no erosion of equity. However, the company carries significant current liabilities (~£822K) and longer-term creditors (~£378K), which must be managed prudently. The negative net current assets indicate potential cash flow mismatches and working capital management issues. Overall, the capital structure is adequate but with liquidity pressure.
Cash Flow Assessment: Current assets (£49K) are minimal compared to current liabilities (£822K), resulting in a large negative working capital position (~-£773K). This implies potential difficulty in meeting short-term obligations without relying on refinancing or asset disposals. The company’s turnover is modest (£34K) and profit (£30K) is small relative to liabilities, limiting internal cash generation capacity. No off-balance sheet liabilities or employees beyond one person are noted. The liquidity risk is heightened and requires close cash flow monitoring and contingency planning.
Monitoring Points:
- Current liabilities and working capital position to detect any worsening liquidity issues.
- Timely filing of accounts and confirmation statements to ensure regulatory compliance.
- Turnover and profitability trends to evaluate operational improvement and cash flow generation.
- Any changes in fixed asset valuations or additional borrowing that could affect solvency.
- Director conduct and any changes in management, given the small size and concentration of control.
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