SAPPHIRE COURT 1 LIMITED

Executive Summary

Sapphire Court 1 Limited is a recently formed property letting company with a strong asset base in investment property but currently negative equity and working capital deficits due to high secured debt. Credit risk is mitigated by director backing and property security but remains elevated given limited trading history and liquidity constraints. Approval is conditional on continued financial support and close monitoring of cash flow and loan servicing.

SAPPHIRE COURT 1 LIMITED - Analysis Report

Company Number: 15239451

Analysis Date: 2025-07-29 13:41 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Sapphire Court 1 Limited is an active private limited company operating in real estate letting. The company shows significant negative net assets (£-1.39m) and negative working capital (£-2.9m), primarily due to high secured bank loans (£3.36m). However, it holds investment property valued at £4.87m (fair value), which is a strong asset base. The director’s statement supports going concern with ongoing backing. Credit approval is conditional upon continued financial support from the controlling shareholder and monitoring of loan servicing capability. The company is in early stages (incorporated Oct 2023) and has no trading history beyond this initial period, so risk is elevated.

2. Financial Strength:
   The balance sheet shows a leveraged position with a significant bank loan secured by fixed and floating charges on the company’s properties. Investment property is the main asset (£4.87m), but the company’s net current liabilities of nearly £2.9m indicate liquidity strain. Shareholders’ funds are negative due to a fair value adjustment (£-1.21m) and accumulated losses. The absence of employees and minimal cash (£100) further suggest limited operational cash flow. The financial position relies heavily on the underlying property valuation and external capital support.

3. Cash Flow Assessment:
   Current assets of £200k (mostly debtors) versus current liabilities of £3.1m reflect a short-term liquidity challenge. Cash on hand is negligible. The company’s ability to meet short-term obligations depends on conversion of debtors to cash and the availability of credit facilities or additional shareholder funding. The sizeable long-term bank loan requires regular servicing; without operational cash flow or external funding, repayment risk is elevated. The director’s support is critical for ongoing liquidity.

4. Monitoring Points:

• Rental income generation and debtor collection efficiency
• Timely servicing of secured bank loans and covenant compliance
• Changes in fair value of investment property impacting net assets
• Any further capital injections or shareholder loans
• Filing of next accounts and confirmation statements on time
• Director or related party transactions that affect liquidity or debt levels