PYTHON (MONTY) PICTURES LIMITED

Credit Opinion: DECLINE
The company’s financial position is deteriorating and its equity cushion is extremely thin. Net assets have halved over the past year to just £65,623, representing only 4.6% of total assets. Cash has fallen by nearly £0.5m in the same period, and the high level of current liabilities (principally accruals) leaves negligible working capital headroom. Without visibility on revenue or profitability (the profit and loss account is not filed), and given the absence of tangible fixed assets to secure lending, the company does not demonstrate the capacity to service additional debt obligations. The declining trajectory and reliance on a single intellectual property portfolio further increase credit risk.

Financial Strength
The balance sheet is highly leveraged: total liabilities of £1,351,192 against total assets of £1,416,815 produce a gearing ratio of 95%. Net assets (shareholders’ funds) are only £65,623, down from £129,141 in the prior year. Fixed assets are negligible—intangible assets are fully amortised, and investments in subsidiaries are stated at nominal cost (£102). The company’s real value lies in its intellectual property, but this is not reflected on the balance sheet. The equity base is insufficient to absorb any material loss or to provide a meaningful buffer for new creditors.

Cash Flow Assessment
Cash at bank stands at £1,164,338, but current liabilities total £1,351,192, resulting in net current assets of just £65,521. The cash balance has declined sharply over the past two years (from £2,122,862 in 2023 to £1,164,338 in 2025), indicating sustained net outflows. A large proportion of liabilities comprises accruals (£1,229,210), likely representing royalties payable to the directors. While the company holds significant cash, it is largely offset by these obligations, and the trend suggests that operating cash flow is negative or that distributions are exceeding income. The lack of filed turnover or profit data makes it impossible to confirm the sustainability of cash generation.

Monitoring Points
- Net assets trend: The reduction from £129,141 to £65,623 in one year requires close observation; further declines would erode the already thin equity.
- Cash balance: Continued depletion of cash reserves would signal that income is insufficient to cover outflows.
- Accruals level: The large accruals balance should be analysed for payment terms and whether it represents deferred but ultimately due obligations.
- Trade creditors: An increase in trade creditors relative to cash could indicate payment pressure.
- Director changes: Any resignation of a director (especially given the age profile) may affect management continuity and the company’s ability to exploit its IP.
- Filing behaviour: The company has not filed a profit and loss account; if it voluntarily provides more detailed financial information in future, that would improve transparency.