S WEST PROPERTY INVESTMENTS LIMITED

Executive Summary

S West Property Investments Limited holds valuable property assets but currently exhibits a strained short-term liquidity position with significant negative working capital. While shareholders’ funds have increased and cash balances improved, the high current liabilities relative to current assets create a risk of short-term cash flow difficulties. Credit approval is possible on a conditional basis, pending clear evidence of liquidity management and refinancing plans to service near-term obligations. Close monitoring of cash flow and debt servicing capacity is essential.

S WEST PROPERTY INVESTMENTS LIMITED - Analysis Report

Company Number: 14121438

Analysis Date: 2025-07-29 18:26 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   S West Property Investments Limited is a recently incorporated private limited company in the real estate letting sector. The company holds significant fixed assets (£2.14 million in land and buildings) but reports substantial current liabilities (£1.49 million) far exceeding current assets (£108k), resulting in a large negative working capital position (-£1.38 million). Although shareholders’ funds have increased to £761k from £668k the prior year, the company’s liquidity position is weak. The ability to meet short-term obligations relies heavily on refinancing or asset liquidity, which can be challenging. The company’s directors appear stable and experienced, but the absence of operating profits or cash flow generation details limits confidence. Therefore, credit approval is conditional on demonstration of a clear plan for managing near-term liabilities and maintaining liquidity, possibly supported by personal or related-party guarantees or confirmed alternative financing arrangements.

2. Financial Strength:
   The balance sheet reflects a strong asset base dominated by fixed assets (land and buildings) valued at £2.14 million with no depreciation charged, indicating asset stability. However, the current liabilities of £1.49 million, including bank loans of £648k and other creditors, significantly exceed current assets of only £108k, resulting in negative net current assets and an overleveraged short-term position. Shareholders’ funds have grown modestly, driven primarily by share premium and retained earnings, but remain insufficient to cover short-term debts. The company’s financial structure is typical for asset-heavy property investment companies but requires careful management of short-term obligations to avoid liquidity stress.

3. Cash Flow Assessment:
   Cash at bank has improved from £38k to £105k year-on-year, indicating some strengthening of liquidity. However, the current liabilities are more than 10 times the cash and current asset base, implying a potential cash flow mismatch. Debtors are minimal and unlikely to provide meaningful short-term liquidity relief. The absence of operating profit or cash flow statements makes assessment incomplete but the negative working capital and high short-term debts pose a material liquidity risk. The company’s ability to service debt depends on rental income, refinancing capacity, or asset disposals, none of which are detailed here. Close attention to cash flow forecasting and covenant compliance is recommended.

4. Monitoring Points:

• Liquidity and working capital trends in subsequent filings, especially current assets relative to current liabilities
• Bank loan covenant compliance and refinancing status
• Rent roll or income generation from property assets to support cash flow
• Changes in debt structure, particularly short-term creditor balances
• Directors’ disclosures on plans for managing liabilities and improving cash flows
• Any guarantees or additional capital injections by shareholders, particularly Mr. Stephen Alan West, who controls the majority shareholding and voting rights