TF PROPERTIES R2R LTD

Executive Summary

TF PROPERTIES R2R LTD currently demonstrates poor financial health with negative net assets and strained liquidity due to high debt levels relative to cash and current assets. The company’s rapid expansion in fixed assets has not yet translated into better financial stability, raising concerns about its ability to meet debt obligations. Given these factors, credit approval is not recommended at this time without significant improvement or additional security.

TF PROPERTIES R2R LTD - Analysis Report

Company Number: 14109348

Analysis Date: 2025-07-20 12:23 UTC

1. Credit Opinion: DECLINE
   TF PROPERTIES R2R LTD exhibits significant financial weakness despite being active and compliant with filing requirements. The company shows a negative net asset position worsening from -£62,252 in 2024 to -£105,228 in 2025, indicating an erosion of equity. Additionally, net current liabilities have increased substantially to -£298,203, highlighting poor short-term liquidity. The sizeable increase in bank loans (long-term creditor) to £483,962 against limited current assets and cash of just £7,201 raises high concerns regarding the company’s ability to meet both its short and long-term debt obligations without additional capital injection or refinancing. The negative shareholders’ funds and working capital deficit suggest vulnerability to economic downturns and limited operational resilience. Management appears to have invested in fixed assets (investment properties), but this has not yet translated into improved liquidity or profitability.

2. Financial Strength:
   The balance sheet shows growth in fixed assets from £191,743 to £676,937 due to investment property additions, which potentially increases asset base and future revenue generation. However, this growth is offset by a dramatic increase in liabilities, particularly bank loans rising from £128,088 to £483,962, resulting in negative net assets and shareholders’ funds. The company is technically insolvent on a net asset basis, which undermines financial strength. The current liabilities vastly exceed current assets, with net current liabilities of £298,203 indicating an immediate liquidity pressure. The balance sheet structure is highly leveraged, which increases financial risk.

3. Cash Flow Assessment:
   Cash holdings have dropped sharply from £75,411 to £7,201 over the year, pointing to cash burn or operational cash flow challenges. The negative working capital position confirms that the company does not have sufficient liquid resources to cover short-term debts. Without detailed cash flow statements, it is difficult to ascertain operational cash generation, but the current data indicates a strained liquidity position. The company's ability to service debt or operational expenses from cash flows appears limited, leading to a high risk of default or need for refinancing.

4. Monitoring Points:

• Debt servicing ability: Monitor interest payments and principal repayments on bank loans.
• Liquidity trends: Watch cash balances and current asset vs. current liability movements in future filings.
• Asset valuation: Track fair value adjustments of investment properties to assess asset quality and potential collateral value.
• Profitability and cash flow: Review future profit and loss accounts and cash flow statements to evaluate improvements.
• Management actions: Observe any capital injections, restructuring, or refinancing to strengthen the balance sheet.