STONEWOOD PARTNERSHIPS (SEVERN BEACH) LIMITED

Executive Summary

Stonewood Partnerships (Severn Beach) Limited is an early-stage building project developer with a small negative net asset position and reliance on related party funding. While currently viable due to parental support and an unqualified audit, the company’s ability to service external credit depends on maintaining this support and improving cash flows from project sales. Credit approval should be conditional on monitoring liquidity and funding stability.

STONEWOOD PARTNERSHIPS (SEVERN BEACH) LIMITED - Analysis Report

Company Number: 13917232

Analysis Date: 2025-07-29 20:41 UTC

Credit Opinion:
CONDITIONAL APPROVAL. Stonewood Partnerships (Severn Beach) Limited is a recently incorporated small private company engaged in building project development. The company currently reports a small net liability position and relies significantly on related party interest-free loans repayable on demand, which poses liquidity risk. However, the directors have secured ongoing support from the parent company, Stonewood Builders Holdings Limited, and there is an unqualified audit report. Approval should be conditioned on continued parental backing and regular monitoring of liquidity and project progress.

Financial Strength:
The balance sheet shows net liabilities of £8,164 as of 30 September 2024, a slight deterioration from £4,551 net liabilities a year earlier. The company holds current assets of £262,821, predominantly stock (£260,270), offset by current liabilities of £270,985 mainly due to amounts owed to related parties (£267,384). Share capital is nominal (£12). Negative net assets indicate the company is currently technically insolvent on a standalone basis, relying on related parties for funding. The company has no employees, limiting operating overheads.

Cash Flow Assessment:
Working capital is negative by £8,164, with current liabilities exceeding current assets. Related party loans are interest-free and repayable on demand, which provides flexibility but also risk if support is withdrawn. Debtors are minimal (£2,551), and there is no indication of cash reserves or external financing. The directors’ statement confirms parental support for at least 12 months, which is critical given the negative net assets and ongoing funding needs. The absence of trading profit and reliance on stock suggests cash flow will depend on successful project completions and sales in a challenging housing market.

Monitoring Points:

• Continued parental support and any changes in related party funding terms.
• Progress on development projects and resultant cash inflows from sales.
• Changes in net liabilities and working capital position in subsequent accounts.
• Any increase in external debt or equity injections to strengthen the balance sheet.
• Market conditions affecting house sales and project viability.
• Directors’ adherence to forecasts and going concern assumptions.