Company Number: 13105931

Analysis Date: 2025-07-20 11:22 UTC

1. Credit Opinion: DECLINE
   TOTAL HOMES GROUP LTD exhibits significant financial weaknesses, including persistent negative net current assets and shareholders' funds deficits over multiple years. The company’s balance sheet shows liabilities exceeding assets, indicating insolvency on a going-concern basis. The minimal cash balance (£1,994) relative to large current liabilities (£1.875 million) raises immediate liquidity concerns. While the company holds substantial fixed assets (property), these are likely illiquid and insufficient to cover short-term obligations. Given these factors and the absence of profitability disclosures, the risk of default or inability to service debt is high. Approval for new lending or extended credit facilities is not recommended without substantial improvement in financial position or credible restructuring plans.

2. Financial Strength:
   The company’s financial strength is weak. Fixed assets total approximately £1.55 million, but current liabilities of £1.87 million overshadow current assets of only £300k, resulting in a net current liability position of about £1.57 million. Shareholders’ funds are negative (£21,391), reflecting accumulated losses or write-downs. The lack of equity capital and ongoing negative working capital position indicate that the company may be financially distressed. There is no evidence of retained profitability or capital injections to strengthen the balance sheet. The fixed assets might be encumbered or not readily convertible to cash to meet liabilities.

3. Cash Flow Assessment:
   Liquidity is severely constrained. Cash at bank is negligible (£1,994), and the company relies heavily on debt financing, as shown by bank loans of £1.16 million within current liabilities. Debtors increased substantially from £40,819 in 2022 to £298,484 in 2023, but the ability to collect these debts timely is uncertain. Negative net current assets suggest the company’s operational cash flow is insufficient to cover short-term obligations. This creates a material risk of liquidity shortfall and inability to meet creditor payments as they fall due.

4. Monitoring Points:

• Monitor quarterly cash flow statements to assess liquidity improvement or further deterioration.
• Track debtor aging and collection rates to evaluate working capital quality.
• Watch for any capital injections or debt restructuring to improve solvency.
• Review any changes in fixed asset valuations or encumbrances.
• Observe management commentary on profitability or operational turnaround in future filings.
• Keep an eye on director appointments and control shifts that may indicate strategic changes.