CREDERA LIMITED
Company number 02387340 · 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.
Commercial Credit Assessment: CREDERA LIMITED
1. Credit Opinion: CONDITIONAL
Rationale: Credera Limited presents a mixed credit profile that warrants approval subject to conditions. The company demonstrates strong historical trading performance with significant revenue growth (29.6% year-over-year to £10.7M in FY2013) and improving profitability. However, several material concerns require mitigation:
- Stale financial data: The detailed accounts available are from FY2013, over a decade old. While more recent filings confirm the company remains active with accounts made up to December 2025, the lack of current detailed financials creates unacceptable uncertainty for unsecured lending.
- Subsidiary status: Credera Holdings Limited holds >75% ownership, meaning financial decisions may be dictated by group strategy rather than standalone commercial merit.
- Recent board turnover: Multiple director resignations in 2025-2026 suggest organisational restructuring that could impact operational stability.
Conditions for approval: 1. Provision of audited accounts for the most recent 2 financial years 2. Parent company guarantee from Credera Holdings Limited 3. Confirmation of the nature and duration of recent organisational changes
2. Financial Strength
Balance Sheet Analysis (FY2013):
| Metric | 2013 | 2012 | Movement |
|---|---|---|---|
| Total Assets | £4,048,119 | £3,070,108 | +31.9% |
| Total Liabilities | £3,206,089 | £2,770,477 | +15.7% |
| Net Assets | £838,258 | £289,979 | +189.1% |
| Shareholders' Funds | £838,258 | £289,979 | +189.1% |
| Equity Ratio | 20.7% | 9.5% | +11.2pp |
Assessment: The balance sheet shows meaningful strengthening, with net assets nearly tripling year-over-year. The equity ratio improved from 9.5% to 20.7%, reducing leverage risk. However, the equity ratio remains modest by banking standards—liabilities still represent nearly 80% of total assets.
Capital Structure: - Called-up share capital: £11,150 (unchanged) - Share premium: £100,590 (unchanged) - Capital redemption reserve: £74,977 (unchanged) - P&L Reserve: £651,541 (up from £103,262)
The entire growth in shareholders' funds derives from retained profits (£548,279 increase), demonstrating genuine earnings quality rather than equity injections. This is a positive indicator of sustainable value creation.
Fixed Assets: Minimal at £120,611, consistent with an asset-light consultancy model. This limits collateral value for secured lending but also reduces capital maintenance requirements.
3. Cash Flow Assessment
Working Capital Position:
| Metric | 2013 | 2012 | Movement |
|---|---|---|---|
| Current Assets | £3,927,508 | £2,960,316 | +32.7% |
| Current Liabilities | £3,206,089 | £2,770,477 | +15.7% |
| Net Current Assets | £721,419 | £189,839 | +279.9% |
| Current Ratio | 1.22x | 1.07x | +0.15x |
| Cash | £1,372,353 | £919,217 | +49.3% |
Assessment: Working capital has improved dramatically, with net current assets increasing from £190K to £721K. The current ratio of 1.22x, while modest in absolute terms, is typical for professional services firms and represents a meaningful improvement from the prior year's tight 1.07x position.
Cash Generation: Cash balances grew by £453K (49.3%), consistent with the £794K profit after tax. The divergence between profit and cash growth suggests some working capital absorption, likely through growing trade debtors.
Debtors: At £2,555,155 (2013), debtors represent 65% of current assets and approximately 24% of turnover. This is within normal parameters for a consultancy business but warrants monitoring for collection risk.
Profitability Metrics:
| Metric | 2013 | 2012 |
|---|---|---|
| Turnover | £10,717,273 | £8,271,063 |
| Gross Margin | 31.1% | 32.2% |
| Operating Margin | 8.1% | 5.7% |
| Net Margin | 7.4% | 6.9% |
| Operating Profit | £863,009 | £468,620 |
The slight gross margin compression (31.1% vs 32.2%) is more than offset by operating leverage, with operating margin expanding by 240 basis points. This suggests the business is scaling effectively with improving overhead absorption.
Interest Coverage: Operating profit of £863K against interest charges of £6.6K yields coverage of approximately 130x—exceptionally strong and indicating minimal debt service risk.
4. Monitoring Points
Critical
- Obtain current financial statements: The 2013 data is over a decade old. Request FY2024 and FY2025 accounts to assess current trading performance and balance sheet position.
- Parent company financials: Request Credera Holdings Limited accounts to understand group financial health and intercompany exposure.
- Recent board changes: Clarify reasons for multiple director resignations (August 2025 - February 2026) and assess impact on business continuity.
Important
- Debtor quality: Monitor debtor days and concentration risk—debtors at 24% of turnover require assessment of collectibility and customer concentration.
- Working capital trends: Track whether the improved current ratio has been sustained or whether growth has consumed working capital.
- Group cash sweep risk: As a subsidiary, assess whether cash generated is retained locally or swept to parent company, which could impair debt service capacity.
Ongoing
- Filing compliance: Company is currently up to date with filings. Monitor for any deterioration in filing timeliness as a leading indicator of financial stress.
- Margin sustainability: Track whether the improved operating margin (8.1%) is sustainable given competitive pressures in management consultancy.
- Staff cost inflation: Given the people-intensive nature of consultancy, monitor cost of sales as a percentage of revenue for margin erosion.