THE OPEN INVESTORS LTD

Executive Summary

The Open Investors Ltd operates in property letting with a valuable investment property asset but currently faces liquidity challenges and negative net assets. Director backing supports the going concern status, but cash flow and debt servicing remain key risks. Conditional credit approval is recommended, contingent on close monitoring of financial performance and continued director support.

THE OPEN INVESTORS LTD - Analysis Report

Company Number: 14329292

Analysis Date: 2025-07-20 13:31 UTC

1. Credit Opinion:
   CONDITIONAL APPROVAL. The Open Investors Ltd is a newly incorporated (2022) private limited company engaged in property letting (SIC 68209). The company currently shows significant net liabilities and negative working capital, but it holds investment property valued at £213k. The directors have provided an undertaking to support the business, which lends credibility to the going concern assumption. However, the sizeable bank loan facility (£189k total) and current liabilities exceeding current assets by £137k raise concerns about short-term liquidity and debt servicing capacity. Approval would be contingent on continued director support, improved cash flow monitoring, and demonstration of rental income stability.

2. Financial Strength:
   The balance sheet reflects a net liability position of £102,892 as of 30 September 2024, a worsening from £27,975 in 2023. Fixed assets (investment property) represent the largest asset (£213k), but the company carries significant current liabilities (£183k) and long-term bank loans (£179k). Shareholders’ funds are negative due to accumulated losses. The company’s capital structure relies heavily on director loans and bank debt rather than equity. The financial trajectory shows increasing liabilities and deteriorating net assets, which limits financial flexibility.

3. Cash Flow Assessment:
   Cash on hand has declined substantially from £111,785 (2023) to £45,294 (2024), indicating cash burn or repayment/expenses exceeding inflows. Current liabilities are £183,388 against current assets of £45,708, resulting in a negative working capital of £137,680. This suggests potential liquidity pressure in meeting near-term obligations. The company’s trade debtors are minimal (£414), implying limited receivables cycle. The directors’ loan support is critical to bridge cash flow gaps until rental income or other revenues improve.

4. Monitoring Points:

• Monthly cash flow and liquidity position, ensuring sufficient funds to meet current liabilities.
• Stability and occupancy rate of investment property generating rental income.
• Timely repayment of bank loans and adherence to loan covenants.
• Directors’ financial support and any changes to loan or capital injection arrangements.
• Filing of next accounts and confirmation statements on schedule to maintain compliance and transparency.