PIRES PROPERTY DEVELOPMENT LTD

Executive Summary

PIRES PROPERTY DEVELOPMENT LTD exhibits significant liquidity and financial stability concerns, with persistent working capital deficits and inconsistent reported net asset figures. The company’s micro-entity status and minimal equity base limit resilience, leading to a recommendation to decline credit facilities without substantial additional security. Close monitoring of cash flow and financial reporting accuracy is essential if any future credit consideration arises.

PIRES PROPERTY DEVELOPMENT LTD - Analysis Report

Company Number: 13102948

Analysis Date: 2025-07-19 12:55 UTC

1. Credit Opinion: DECLINE
   PIRES PROPERTY DEVELOPMENT LTD shows a persistently negative net current assets position (working capital deficit), with current liabilities substantially exceeding current assets (£265k liabilities vs. £26k assets in 2023). This indicates liquidity stress and an inability to meet short-term obligations from available current assets. Despite reported net asset values being positive in the financial data section, the accounts document shows negative net assets of £239,000, suggesting inconsistencies or possible errors. Such a mismatch raises concerns about financial reporting accuracy and management oversight. The small scale (micro-entity) and minimal share capital (£2) further limit the company’s financial resilience and capacity to absorb shocks. Given these factors, the company exhibits weak financial strength and cash flow concerns, making it unsuitable for credit extension without substantial additional security or guarantees.

2. Financial Strength:
   The company’s balance sheet reveals significant current liability burdens far exceeding current assets over multiple years, indicating ongoing liquidity pressure. Net current liabilities worsen from approximately £187k in 2022 to £239k in 2023. Although the company classifies as a micro-entity, the scale of liabilities suggests reliance on short-term creditor funding or loans. Shareholders’ funds (equity) are minimal and volatile as per the reported data. The presence of only one employee and minimal fixed assets implies limited operational scale and asset backing. Overall, the financial structure is weak with high gearing and questionable net asset status.

3. Cash Flow Assessment:
   The working capital deficits highlight a tight or negative cash conversion cycle. Limited current assets (cash, receivables, stock) are insufficient to cover impending liabilities, risking payment delays or defaults. The small share capital and single employee indicate limited internal resources to generate cash inflows rapidly. Without external capital injections or improved business cash flows, liquidity risks remain acute. No detailed profit and loss or cash flow statements were provided, but the balance sheet position strongly suggests constrained operational cash flow and potential reliance on director loans or informal financing.

4. Monitoring Points:

• Net current asset/liability trend: Watch for improvements in working capital management and reduction in short-term liabilities.
• Timely filing and consistency of financial statements: The discrepancy in net asset figures requires clarification for transparency.
• Cash flow generation metrics: Monitor operating cash flow and debtor collection efficiency.
• Director financial support: Assess any personal guarantees or loans underpinning the company’s finances.
• Business activity and contract pipeline: Given SIC code 41100 (development of building projects), monitor project acquisition and completion rates and their impact on liquidity.