SILVER EDGE DEVELOPMENTS LIMITED

Executive Summary

Silver Edge Developments Limited exhibits a small-scale operational profile with positive net working capital but negative net worth due to significant intercompany debt. Liquidity is constrained with low cash reserves, relying heavily on group funding for solvency. Conditional credit approval is recommended, contingent on active monitoring of cash flows, intercompany funding, and asset realizability to ensure ongoing repayment capacity.

SILVER EDGE DEVELOPMENTS LIMITED - Analysis Report

Company Number: 13298641

Analysis Date: 2025-07-20 13:40 UTC

1. Credit Opinion:
   CONDITIONAL APPROVAL. Silver Edge Developments Limited is an active private limited company operating in building project development. The company reports net liabilities of £291,644 at 31 March 2024, worsening from £174,621 the prior year, primarily due to significant long-term intercompany debt (£1.12M owed to group undertakings). While the company holds substantial current assets (£920k), mainly development land and debtors, the net current assets are positive (£825k), indicating reasonable short-term liquidity. However, the sizeable related party loan and net negative equity highlight reliance on the parent group for funding, which raises concerns about independent repayment capacity. Approval may be granted with conditions requiring ongoing monitoring of cash flows and group support.

2. Financial Strength:
   The balance sheet shows fixed assets of £7k (motor vehicles) and current assets of £920k dominated by development land (£705k) and trade-related receivables/prepayments (£203k). Current liabilities are modest at £95.6k, giving a strong net working capital position of £825k. However, long-term liabilities of £1.12M owed to group undertakings exceed total net assets, resulting in net liabilities of £291k. Share capital is nominal at £1, and accumulated losses stand at £291k. This indicates weak capitalisation and dependency on intra-group funding rather than external equity or long-term debt. The company is classified as small and remains compliant with filing deadlines.

3. Cash Flow Assessment:
   Cash at bank is low at £12k, a significant reduction from £103k the previous year. The company’s working capital is supported mainly by non-cash assets (development land and debtors), which may not be quickly convertible to cash. The related party loans are interest-free and repayable on demand without formal terms, implying potential liquidity support from the parent group. The absence of an audit and limited disclosure of profit and loss performance constrains full cash flow assessment. The low cash balance relative to creditors and ongoing development costs suggests potential liquidity strain without group assistance.

4. Monitoring Points:

• Monitor changes in intercompany loan balances and any formalisation of repayment terms.
• Track cash balances and cash flow statements for signs of improving liquidity or increasing reliance on group funds.
• Watch net asset position and any further erosion of equity.
• Evaluate the realizability of development land and debtors, as these underpin working capital.
• Confirm continued support from the parent company to cover funding gaps.
• Review director and related party transactions for any changes in indebtedness or guarantees.