TEAM ROBERTS LIMITED
Company number 03061862 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Credit Analysis: Team Roberts Limited (03061862)
1. Credit Opinion: CONDITIONAL
Reasoning: Team Roberts Limited presents a mixed credit profile. The company benefits from a 30-year trading history and an established Triumph franchise, with net assets improving from £66,660 to £79,619 in the latest period. However, the balance sheet is dangerously thin with liabilities representing 89% of total assets, cash has deteriorated to just £10,047, and the business carries significant inventory risk. Any credit facility should be conditional on strengthened cash reserves, appropriate security, and covenant protections.
2. Financial Strength
Balance Sheet Leverage – Critical Concern
| Metric | 2025 | 2024 | 2023 |
|---|---|---|---|
| Net Assets | £79,619 | £66,660 | £11,927 |
| Total Assets | £1,364,596 | £1,195,822 | £1,073,776 |
| Equity/Assets Ratio | 5.8% | 5.6% | 1.1% |
| Debt-to-Equity | ~15.3:1 | ~17.5:1 | ~84:1 |
- The company is thinly capitalized throughout its history, with equity consistently below 10% of total assets
- The 2023 nadir (net assets of just £11,927) demonstrated how quickly the equity buffer can erode
- While the trajectory is improving, the margin of safety remains wafer-thin
- Share capital of just £200 indicates minimal equity injection from shareholders over 30 years
Asset Composition – Inventory Concentration Risk
| Component | 2025 | % of Current Assets |
|---|---|---|
| Stock | £1,200,291 | 88% |
| Debtors | £154,258 | 11% |
| Cash | £10,047 | <1% |
- The business model is heavily inventory-dependent, typical of motorcycle retail but creating significant liquidity risk
- Stock represents 88% of current assets – conversion to cash depends on consumer demand and is subject to markdown risk
- Debtors have nearly tripled from £53,784 to £154,258, warranting investigation into credit control practices
3. Cash Flow Assessment
Liquidity Position – Deteriorating
| Metric | 2025 | 2024 | 2021 |
|---|---|---|---|
| Cash | £10,047 | £33,868 | £219,065 |
| Current Ratio | 1.12:1 | 1.03:1 | 1.18:1 |
| Net Current Assets | £145,847 | £30,464 | £183,493 |
- Cash has declined by 95% from the 2021 peak of £219,065 to £10,047
- The current ratio of 1.12:1 is barely adequate and relies almost entirely on stock realization
- Quick ratio (excluding inventory) is approximately 0.13:1 – critically low
- The business is asset-rich but cash-poor, with minimal headroom for unexpected costs or trading downturns
Working Capital Dynamics
- Net current assets have improved to £145,847 from £30,464, but this improvement is driven by increased stock and debtors, not cash generation
- The increase in long-term creditors from £82,655 to £168,805 suggests the business is extending payment terms on larger commitments (likely floor plan finance for inventory)
- Provisions of £15,331 should be investigated for nature and timing
Cash Flow Concern Pattern:
The historical cash trend is alarming: - 2021: £219,065 - 2022: £191,742 - 2023: £53,869 - 2024: £33,868 - 2025: £10,047
This sustained deterioration suggests cash generation from trading is insufficient to support the current asset base, or significant capital investment is occurring without corresponding profit retention.
4. Monitoring Points
Immediate Concerns:
- Cash Position: Monitor monthly bank statements. Cash below £5,000 would represent near-term liquidity crisis territory
- Debtor Collection: The tripling of debtors requires explanation – obtain ageing analysis and review credit control procedures
- Inventory Turn: Request stock turnover metrics and aged inventory reports; assess obsolescence risk on seasonal motorcycle stock
- Creditor Days: Track whether the company is stretching supplier payments to preserve cash
Structural Concerns:
- Floor Plan Finance: The increase in long-term creditors likely reflects HP/lease finance on stock. Obtain full schedule of finance commitments and maturity profile
- Related Party Exposure: Note the PSC structure shows Philip David Roberts (not listed as current director) holds 25-50% ownership. Clarify the relationship between PSCs and any inter-company balances
- Provisions: Understand the nature of the £15,331 provision and likelihood of cash outflow
Recommended Covenant Package:
- Minimum cash threshold of £15,000
- Net current assets floor of £100,000
- Debtors not to exceed 15% of current assets without explanation
- Quarterly management accounts to be provided
- Negative pledge on fixed assets without consent
Positive Factors Acknowledged:
- 30-year unbroken trading history
- Triumph franchise provides brand stability and manufacturer support
- Net assets trending upward over two consecutive years
- Filing compliance is good – no overdue filings
- Business model is well-understood automotive retail