UPPERCRUST 2 LTD

Executive Summary

Uppercrust 2 Ltd shows signs of financial recovery after a sharp deterioration but continues to operate with tight liquidity and minimal net assets. The company’s ability to service short-term liabilities is dependent on maintaining strong cash management and controlling creditor exposure. Conditional credit approval is recommended with close ongoing monitoring of working capital and cash flow metrics to mitigate risk.

UPPERCRUST 2 LTD - Analysis Report

Company Number: SC678990

Analysis Date: 2025-07-29 12:42 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Uppercrust 2 Ltd demonstrates a mixed financial position with recent improvement after a significant deterioration in 2023. The company remains active and current with filings, which supports transparency and compliance. However, the persistent net current liabilities and relatively low net assets (£1,572 as of 31/10/2024) indicate tight liquidity and limited financial buffer. Given the nature of the business (unlicensed restaurants and cafes) which is sensitive to economic cycles and consumer spending fluctuations, credit approval should be conditional on close monitoring of working capital and cash flow stability.

2. Financial Strength:
   The balance sheet shows a modest fixed asset base (£3,507) and equity capital (€100 share capital plus retained earnings of £1,472). The net assets declined sharply in 2023 (negative £267,873) but have rebounded to a positive £1,572 in 2024, indicating some recovery though still weak. Current liabilities remain high (£97,470) relative to current assets (£96,201), resulting in a small net current liability (£-1,269). The company has managed to reduce prior year creditor levels but still carries a considerable short-term creditor load. Provisions for liabilities (£666) may reflect potential contingent obligations.

3. Cash Flow Assessment:
   Cash balances are relatively strong at £94,146, which covers current liabilities nearly 1:1. Debtors are low (£2,055), indicating limited credit risk from customers but also possibly low sales or tight credit control. The company’s working capital remains negative, presenting a liquidity risk if cash inflows slow or creditor demands increase. The operating lease commitments (£6,138 within one year) add to fixed overheads, which must be serviced from operating cash flow. The absence of an income statement limits detailed cash flow analysis, but the unchanged average employee count (10) suggests stable payroll commitments.

4. Monitoring Points:

• Continued improvement or stability in net assets and working capital position.
• Cash flow from operations to ensure coverage of creditor payments and lease commitments.
• Trends in creditor days and debtor collection to avoid liquidity strain.
• Any changes in provisions that might indicate emerging liabilities.
• Management’s response to tight liquidity and strategies to improve financial resilience.
• External factors impacting the hospitality sector, particularly consumer demand and cost inflation.