SHARP PROPERTY HOLDINGS LANCASHIRE LTD

Executive Summary

Sharp Property Holdings Lancashire Ltd operates with a solid asset base in investment property but faces liquidity challenges due to negative working capital and high secured debt. While compliance and recent equity improvement are positive signs, related party financial arrangements and loan write-offs highlight areas requiring further scrutiny. Overall, the company presents a medium risk profile necessitating detailed review of cash flows and intercompany transactions.

SHARP PROPERTY HOLDINGS LANCASHIRE LTD - Analysis Report

Company Number: 12948633

Analysis Date: 2025-07-20 17:29 UTC

1. Risk Rating: MEDIUM

Justification: Sharp Property Holdings Lancashire Ltd shows modest net assets (£24,725) backed by significant fixed assets in investment property (£255,844). However, the company exhibits persistent negative net current assets (-£61,529) and substantial long-term secured debt (£170,855), indicating some solvency pressure. The company is current with filings and has no evident regulatory issues, but liquidity constraints and reliance on director guarantees warrant caution.

2. Key Concerns:

• Negative Working Capital: The company’s current liabilities exceed current assets by over £61k, which may impair short-term liquidity and operational flexibility.
• High Secured Debt: The bank loans secured on property (£170,855) are substantial relative to equity, increasing financial leverage and risk especially if property values or rental income decline.
• Related Party Transactions and Debt Write-Offs: Significant loans to related entities under common control and a large loan write-off (£70,438) suggest potential financial interdependencies and credit risk not fully transparent to external investors.

3. Positive Indicators:

• Asset Base Stability: Investment property remains valued consistently at £255,844 with no impairment, providing tangible collateral backing.
• Improvement in Net Assets: The company moved from negative equity in prior years to positive shareholders’ funds of £24,725 as at March 2024, showing some recovery.
• Compliance: Accounts and confirmation statements are up to date, with no overdue filings or penalties, reflecting good governance practice.

4. Due Diligence Notes:

• Investigate the nature and terms of related party loans and the circumstances around the £70,438 loan write-off to assess risk of further impairments or contingent liabilities.
• Review cash flow statements and rental income stability to evaluate ongoing liquidity and debt servicing capacity.
• Confirm property valuations and any encumbrances to understand collateral quality supporting the secured bank loans.
• Assess director guarantees and personal financial exposure, as these impact overall risk profile for lenders and investors.