TSG PERTH LIMITED
Company number SC353953 · 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: TSG PERTH LIMITED
1. Credit Opinion: APPROVE
Reasoning: TSG Perth Limited presents a very strong credit profile characterized by an exceptionally well-capitalized balance sheet, virtually no debt, and consistent profitability evidenced by growing retained earnings and regular dividend distributions. The company holds £2.29M in investment property with minimal liabilities (£52K), yielding a debt-to-equity ratio near zero. Liquidity is robust with a current ratio exceeding 12:1. The principal risk lies in asset concentration—investment property represents approximately 78% of total assets—and the company's small operational footprint (two employee-directors). However, the financial stewardship demonstrated over the review period is commendable, with liabilities reduced from £745K in 2018 to current levels while maintaining dividend payments.
2. Financial Strength
Balance Sheet Summary (Jan 2025):
| Metric | 2025 | 2024 | YoY Change |
|---|---|---|---|
| Total Assets | £2,937,141 | £2,898,820 | +1.3% |
| Total Liabilities | £52,064 | £75,817 | -31.4% |
| Net Assets | £2,885,077 | £2,823,003 | +2.2% |
| Shareholders' Funds | £2,885,077 | £2,823,003 | +2.2% |
Asset Composition: - Investment Property: £2,293,429 (78% of total assets) - Tangible Fixed Assets: £7,567 - Cash: £631,801 (21.5% of total assets) - Debtors: £4,344
Key Observations:
The balance sheet is exceptionally strong. Net assets have grown steadily from £1.93M (2018) to £2.89M (2025), representing approximately 49% growth over seven years. The company carries virtually no leverage—current liabilities of £52K against total assets of £2.94M represents a liabilities-to-assets ratio of just 1.8%.
The investment property valuation has remained static at £2,293,429 for at least two consecutive years. While this is acceptable under FRS 102 (investment properties are revalued annually with surpluses/deficits taken to P&L), the lack of valuation movement should be monitored. The property likely generates rental income, which underpins the company's profitability.
The 2018 balance sheet showed significantly higher liabilities at £745K, which have been systematically reduced to the current £52K. This deleveraging demonstrates disciplined financial management and a conservative approach to debt.
Gearing: Effectively zero. No long-term debt facilities visible on the balance sheet.
3. Cash Flow Assessment
Liquidity Position:
| Metric | 2025 | 2024 | 2023 |
|---|---|---|---|
| Cash | £631,801 | £588,998 | £458,823 |
| Current Assets | £636,145 | £593,143 | — |
| Current Liabilities | £52,064 | £75,817 | £33,526 |
| Current Ratio | 12.2x | 7.8x | — |
| Net Current Assets | £584,081 | £517,326 | — |
Cash Trajectory:
| Year | Cash | Movement |
|---|---|---|
| 2020 | £1,413,626 | — |
| 2021 | £1,343,461 | -£70,165 |
| 2022 | £1,262,928 | -£80,533 |
| 2023 | £458,823 | -£804,105 |
| 2024 | £588,998 | +£130,175 |
| 2025 | £631,801 | +£42,803 |
The significant cash decline from 2020-2023 warrants attention. The reduction from £1.41M to £459K coincides with the period of liability reduction, suggesting cash was deployed to pay down obligations. The reversal since 2023 is encouraging, with cash rebuilding by approximately £173K over two years.
Profitability Indicators:
Retained earnings increased by £62,074 (from £2,822,901 to £2,884,975) after paying £80,000 in dividends, implying underlying profitability of approximately £142,074 for FY2025. This represents a healthy return on the investment property asset.
Working Capital Assessment: Net current assets of £584K provide substantial headroom. The composition of current liabilities is favorable—£47,883 relates to tax and social security (routine obligations), with only £4,181 in trade and other creditors. There are no bank overdrafts or short-term debt facilities visible.
Dividend Policy: Consistent £80,000 annual dividends suggest sustainable cash generation from property income. Dividend cover appears adequate at approximately 1.8x.
4. Monitoring Points
High Priority:
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Investment Property Valuation: The property has been held at £2.29M without apparent revaluation movement. Request independent valuation confirmation, particularly given current UK commercial property market conditions. Any impairment would significantly erode the net asset position.
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Income Verification: As a small company, turnover and profit figures are not filed. Request management accounts to confirm rental income streams, occupancy rates, and tenant creditworthiness. The property's income-generating capacity is critical to servicing any new debt.
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Cash Rebuild Trajectory: Monitor whether the positive cash trend since 2023 continues. The 2020-2023 cash decline was substantial and should not recur.
Medium Priority:
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Related Party Transactions: Director loans of £2,516 are minimal but should be monitored for increases. The husband/wife ownership structure (Stephen 50-75%, Karen 25-50%) concentrates control—understand succession planning.
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Tax Liability Composition: Corporation tax of £47,883 represents 92% of current liabilities. Verify this is current tax payable rather than deferred, and confirm no disputes with HMRC.
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Employee Costs: With only 2 employees (likely the directors), understand how property management is handled—are there management fees or contracted services not visible on the balance sheet?
Ongoing:
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Filing Compliance: Currently good—accounts to January 2025 filed, confirmation statement up to date. Continue monitoring.
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Creditor Days: Other creditors reduced from £9,954 to £2,382—verify this reflects normal trade patterns rather than accelerated payment to related parties.
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Capital Expenditure: Tangible assets declining from £12,248 to £7,567 suggest minimal reinvestment in operational assets—consistent with a property-holding model but worth confirming no deferred maintenance on the investment property.