TH SPACES LTD

Executive Summary

TH SPACES LTD operates with a strong asset base in investment property but shows negative equity and tight liquidity, reflecting a fragile financial position. While current liabilities are manageable and no employees increase operational flexibility, the company relies heavily on external and director financing. Conditional credit approval is recommended with close monitoring of cash flows, asset valuations, and debt servicing to mitigate risk.

TH SPACES LTD - Analysis Report

Company Number: 13844853

Analysis Date: 2025-07-20 13:12 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   TH SPACES LTD is a relatively new company (incorporated in 2022) operating in the real estate letting and sales sector. The company’s net liabilities position (-£7,455) and negative shareholders’ funds indicate a fragile equity base. However, the company holds significant investment property assets (£634,504) that support overall asset backing. The presence of director loans (£52,565) and bank loans (£590,690) shows reliance on external and related-party financing. The company’s ability to meet short-term liabilities is weak, with current liabilities (£5,330) close to current assets (£6,626), but net current assets remain positive (£1,296). Given the thin equity, modest working capital, and the sector’s dependency on property market conditions, credit approval should be conditional on enhanced monitoring of cash flows, asset valuations, and debt servicing capacity.

2. Financial Strength
   The balance sheet shows a significant investment property asset base that increased slightly by £19,658 during the year, indicating some capital expenditure or acquisitions. However, the company’s net liabilities and negative equity reflect accumulated losses or funding structure heavily weighted towards debt. The long-term liabilities predominantly comprise bank loans and director loans, totaling £643,255, which is slightly down from the previous year but still substantial relative to assets. The lack of employees reduces operational cost pressure but also indicates a lean operation potentially reliant on outsourcing or minimal activity. Overall, the financial strength is weak due to negative net assets, but the company’s asset base in property provides some collateral value.

3. Cash Flow Assessment
   Cash balances have decreased from £10,990 to £6,622 year-on-year, and trade debtors have nearly vanished (£4 versus £7,161 previously), suggesting limited current operational inflows. Current liabilities have decreased slightly, improving net current assets from £10,771 to £1,296, but the working capital position remains very tight. The company’s liquidity is modest, with cash barely covering short-term creditors. Its ability to service bank and director loans depends on either rental income or other operational cash inflows not clearly detailed here. The absence of employees implies low overheads but also limited revenue-generating capacity. Managing cash flows prudently and ensuring timely debt repayments will be critical.

4. Monitoring Points

• Watch net asset position and equity movements for further deterioration or improvement.
• Track cash flow trends, especially cash reserves versus short-term liabilities.
• Monitor rental income streams and occupancy rates to assess operational cash inflows.
• Review director loan balances and repayment terms for potential calls on liquidity.
• Follow any changes in investment property valuations as they impact collateral and solvency.
• Confirm timely filing of accounts and confirmation statements to avoid compliance risks.
• Keep an eye on broader real estate market conditions which may affect asset values and business viability.