RCM ASSET MANAGEMENT LTD

Executive Summary

RCM Asset Management Ltd has shown rapid growth in assets through investment property acquisition but carries significant long-term debt, resulting in a fragile net asset position. Liquidity is currently adequate, but the high leverage and minimal equity require cautious credit approval conditional on further assessment of creditor terms and cash flow sustainability. Ongoing monitoring of debt structure and cash collections is essential to mitigate credit risk.

RCM ASSET MANAGEMENT LTD - Analysis Report

Company Number: 13108597

Analysis Date: 2025-07-20 12:15 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   RCM Asset Management Ltd is an active private limited company with recent incorporation in 2021. The company shows significant growth in asset base, notably acquiring investment property valued at £484,627 by January 2024, which markedly strengthens its asset position compared to prior years. However, current liabilities have increased drastically to £521,303 due after more than one year, closely offsetting total assets, resulting in a very thin net asset base of £973. The company’s working capital remains positive but modest at £37,649. Given this, the company demonstrates potential to meet obligations but the high level of long-term creditors relative to assets poses a risk and warrants close monitoring, thus credit approval should be conditional on further due diligence on creditor terms and repayment plans.

2. Financial Strength:
   The balance sheet shows marked improvement from a negative net asset position (£-177) in 2023 to a barely positive net asset position (£973) in 2024, mainly driven by the addition of investment property (£484,627). Current assets rose to £45,690, including cash of £11,937 and trade debtors of £33,395. However, the company’s long-term creditors increased substantially to £521,303, indicating significant external financing or obligations. Shareholders’ funds remain minimal (£973), reflecting limited equity buffer. The company has no fixed assets other than investment property and no employees, indicating a lean operational structure. Overall, the financial strength is fragile due to the high leverage and minimal equity.

3. Cash Flow Assessment:
   Cash at bank decreased from £25,745 in 2023 to £11,937 in 2024, which may indicate cash outflows related to property acquisition or operational expenses. Trade debtors increased significantly, suggesting potential delays in cash collection or new contracts, which may impact liquidity. Current liabilities increased slightly but remain manageable against current assets, maintaining positive net working capital (£37,649). The large long-term creditor balance likely represents loans or financing arrangements requiring scrutiny for repayment terms. Absence of employees suggests low ongoing cash burn. The company’s ability to generate positive operating cash flows is uncertain without detailed P&L data, but current liquidity appears adequate for short-term obligations.

4. Monitoring Points:

• Closely review the nature and terms of the long-term creditors (£521,303), including repayment schedules and interest obligations.
• Monitor cash flow trends, especially collection of trade debtors (£33,395) and maintenance of adequate cash balances.
• Track equity movements and profitability to build a stronger capital base and reduce reliance on external creditors.
• Assess ongoing operational performance and ability to generate sufficient cash to service debt and support growth.
• Keep watch for timely filing of accounts and confirmation statements, which are currently up to date.
• Review any changes in ownership or director control that might impact governance or financial strategy.