SUNDERLAND COMMERCIAL PROPERTIES LTD

Executive Summary

Sunderland Commercial Properties Ltd shows high financial risk due to a large short-term debt burden and negative net assets despite growth in investment property. The company’s liquidity position is weak, raising concerns about its ability to meet obligations. Compliance with filing requirements and asset growth are positive signs, but detailed review of financing and governance is recommended.

SUNDERLAND COMMERCIAL PROPERTIES LTD - Analysis Report

Company Number: 13909784

Analysis Date: 2025-07-20 17:09 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency risk, as evidenced by negative net current assets and shareholders' funds as of the latest financial year end. The current liabilities have increased sharply, driven by substantial bank loans due within one year, which the company’s current assets and cash position are insufficient to cover.

2. Key Concerns:

• Severe liquidity shortfall: Current liabilities of approximately £1.13 million contrast sharply with current assets of only £10,311, resulting in a negative working capital position of over £1.12 million. This raises immediate concerns about the company’s ability to meet short-term obligations.
• Negative shareholders’ funds: The equity position has swung from modest positive (£6,113 in 2023) to a negative £21,609 in 2024, indicating accumulated losses or recognition of impairments that erode the company’s net worth.
• Concentration of control and limited governance: One individual, Mr. Timothy Quentin Taylor, holds 75-100% ownership and voting rights, which may limit oversight and raise concerns about governance and decision-making transparency.

3. Positive Indicators:

• Investment property asset growth: The company’s investment property increased substantially from £152,521 to £1,099,052, suggesting expansion or acquisition of assets that may generate future income or capital appreciation.
• No overdue filings: The company is compliant with statutory filing deadlines, indicating administrative discipline and regulatory compliance at this stage.
• Small employee base and low operating complexity: With only two employees, the company likely has low fixed overheads, which may assist in managing costs.

4. Due Diligence Notes:

• Examine the nature and terms of the bank loans: The £656,339 bank loan due within one year is a material liability. Understanding repayment schedules, covenants, and refinancing options is critical.
• Review cash flow forecasts and income streams: Assess the company’s ability to generate rental income or other cash inflows to service debt and improve liquidity.
• Investigate impairment or valuation adjustments: The shift from positive to negative net assets suggests possible write-downs; reviewing the valuation methodology and reason for adjustments on investment property is necessary.
• Assess related party transactions and governance: Given the sole controlling shareholder/director, confirm that transactions are conducted at arm’s length and governance structures are adequate.
• Confirm absence of contingent liabilities beyond those disclosed: To rule out hidden risks that could exacerbate financial stress.

Executive Summary:
Sunderland Commercial Properties Ltd currently faces significant solvency and liquidity challenges, with liabilities greatly exceeding short-term assets and a negative equity position as of February 2024. While the company has expanded its investment property holdings substantially, immediate concerns exist around its ability to meet near-term obligations without additional capital or refinancing. Further due diligence should focus on loan terms, cash flow viability, and governance oversight.