PREMALD HOMES LTD

Executive Summary

Premald Homes Ltd is currently in a weak financial position with increasing losses, negative net assets, and deteriorating liquidity. The company’s capacity to service debt or meet short-term liabilities is questionable, warranting a decline of credit facilities at this time. Close monitoring of cash flow and any turnaround efforts is essential should credit terms be reconsidered in the future.

PREMALD HOMES LTD - Analysis Report

Company Number: 13103315

Analysis Date: 2025-07-20 11:14 UTC

1. Credit Opinion: DECLINE Premald Homes Ltd demonstrates significant financial distress as evidenced by persistent and deepening negative net assets and shareholders’ funds over the last four years. The company’s net liabilities have increased from £3.6k in 2022 to over £9k by the end of 2023. This indicates ongoing losses and erosion of capital. Moreover, the company’s working capital position is negative and deteriorating, with net current liabilities of £5,991 in 2023 compared to £511 in 2022. Despite being active and compliant with filings, the lack of positive cash flow and increasing creditor exposure signals a weak capacity to meet short-term obligations. Given these factors, the risk of default is elevated and the ability to service new or existing debt is questionable without external capital injection or a substantial turnaround.

2. Financial Strength: The balance sheet reveals a fragile financial position. The company has minimal share capital (£1) and accumulated retained losses of £9,057, resulting in negative shareholders’ funds of the same amount. Current liabilities exceed current assets by almost £6k, reflecting poor liquidity and a strained working capital cycle. The company carries long-term creditors of £3,065, adding to financial obligations. The absence of fixed assets and minimal cash reserves (£480) further weaken asset coverage for liabilities. There is no indication of profitability or asset growth, which suggests limited financial resilience.

3. Cash Flow Assessment: Cash at bank has fallen sharply from £5,000 in 2022 to only £480 in 2023, pointing to cash burn and insufficient operational cash generation. Negative net current assets imply the company is reliant on creditor financing for day-to-day operations. With trade creditors and other payables increasing, the company’s liquidity risk is high. Without significant cash inflows or refinancing, the company may struggle to meet immediate liabilities and operational expenses.

4. Monitoring Points:

• Continued trajectory of net losses and negative retained earnings.
• Cash balances and liquidity ratios (current ratio, quick ratio).
• Timeliness and completeness of creditor payments.
• Any capital injections or restructuring plans by directors.
• Changes in revenue and profitability trends once available.
• Director management actions given the appointment of a new director in early 2024.