SMILE DEVELOPMENTS LTD

Executive Summary

SMILE DEVELOPMENTS LTD is currently in a financially distressed position with negative net assets and minimal liquidity, raising significant concerns about its ability to meet debt obligations. The company’s stagnant turnover and substantial long-term liabilities limit its creditworthiness. Credit facilities are not recommended without substantial improvement in financial metrics or capital restructuring.

SMILE DEVELOPMENTS LTD - Analysis Report

Company Number: 13127001

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

1. Credit Opinion: DECLINE
   SMILE DEVELOPMENTS LTD demonstrates a weak financial position with persistent negative net assets (£-89,854 as of 31 January 2024) and minimal turnover (£5,500 in 2023). The company’s liabilities exceed assets substantially due to long-term creditors of £210,895, indicating high gearing and potential solvency concerns. Current assets are negligible (£941) relative to current liabilities, reflecting poor short-term liquidity. Absence of positive cash flow from operations and sustained losses signal an inability to service new or existing debt obligations reliably.

2. Financial Strength:
   The balance sheet reveals a static fixed asset base (£120,000) but deteriorating equity position over four years, moving from £-52,871 in 2021 to £-89,854 in 2024. The company is classified as a micro entity but shows no meaningful revenue growth or profitability. The heavy creditor load falling due after more than one year (£210,895) dominates the capital structure, undermining financial resilience. The negative shareholders’ funds confirm ongoing accumulated losses and insufficient capital injection. Overall, the financial strength is weak with limited buffer against adverse market conditions.

3. Cash Flow Assessment:
   Current assets (£941) barely cover short-term liabilities, and net current assets remain positive but minimal, suggesting tight working capital. The lack of cash and equivalents disclosed and minimal turnover imply poor liquidity generation. Given the negative net assets and ongoing losses, internal cash generation is unlikely to improve without equity support or operational turnaround. The company’s capacity to meet immediate obligations or fund growth internally is severely constrained.

4. Monitoring Points:

• Monitor quarterly cash flow statements to detect any improvements or further deterioration in liquidity.
• Track turnover and profitability trends to assess operational viability.
• Review creditor payment terms and any restructuring efforts to manage long-term liabilities.
• Observe director actions or capital injections that may affect solvency.
• Watch for any overdue filings or signs of financial distress such as late payments or legal actions.