SUSSEX PADS LTD

Executive Summary

Sussex Pads Ltd shows a deteriorating financial position with negative net assets and working capital deficits, undermining its capability to service debt. The company’s balance sheet is heavily leveraged, and liquidity constraints present a high credit risk. Credit extension is not recommended without significant financial improvement or capital support.

SUSSEX PADS LTD - Analysis Report

Company Number: 13436162

Analysis Date: 2025-07-29 13:55 UTC

1. Credit Opinion: DECLINE
   Sussex Pads Ltd exhibits persistent negative net assets and working capital deficits over the last three years, indicating financial strain and insufficient liquidity to meet short-term obligations. The company operates in real estate letting but has no employees and relies on a single director with full control. The negative equity position worsened from -£29k in 2021 to -£79k in 2024, showing declining financial health. Without evidence of incoming cash flows or new funding sources, the ability to service debt and sustain operations is doubtful. Lending or extending credit should be declined until financial restructuring or capital injection improves balance sheet strength.

2. Financial Strength:
   The company holds fixed assets of £462k consistently, likely representing property or leases, but these are heavily leveraged with current liabilities exceeding current assets by £241k in 2024. Total liabilities, including long-term creditors (£299k), surpass total assets, resulting in net liabilities of £79k. Shareholders’ funds remain negative and have deteriorated over time, signaling accumulated losses or insufficient capital. The lack of retained earnings or reserves further weakens the equity base.

3. Cash Flow Assessment:
   Current liabilities (£469k) far exceed current assets (£227k), yielding a negative net working capital position of -£242k, indicating poor liquidity and potential cash flow difficulties. The absence of employees suggests minimal operating expenses, but also raises concerns about operational scale and revenue generation. Without detailed cash flow statements, the negative working capital and recurring net liability position imply the company struggles to meet immediate financial commitments and may depend on external financing or capital calls by the sole shareholder.

4. Monitoring Points:

• Watch for any equity injections or debt restructuring that may improve net asset position.
• Monitor accounts filings for signs of improved liquidity or profitability.
• Track changes in current liabilities and creditor terms to assess short-term solvency risk.
• Review director’s reports or strategic plans for evidence of business turnaround or expansion.
• Observe if any new directors or management are appointed to strengthen governance.