VEGAPROP LIMITED

Executive Summary

Vegaprop Limited operates with a highly leveraged balance sheet dominated by related party loans, resulting in negative working capital and strained liquidity. Despite stable fixed asset investments, the company's minimal equity and cash reserves undermine its capacity to service debt in the short term. Without refinancing or capital injection, the credit risk remains elevated, leading to a recommendation to decline credit facilities at this time.

VEGAPROP LIMITED - Analysis Report

Company Number: 13737791

Analysis Date: 2025-07-19 11:53 UTC

Credit Opinion:
DECLINE. Vegaprop Limited’s financials reveal significant liquidity risk and weak short-term financial health due to very large current liabilities (£13.13 million) compared with minimal current assets (£0.23 million) as of June 2024, resulting in a severely negative working capital position (-£12.9 million). The company's net assets and shareholders' funds are positive but very small (£129,862), indicating minimal equity buffer. Heavy reliance on related party loans and large interest payments further exacerbate credit risk. The company’s ability to meet short-term obligations without additional support or refinancing is highly questionable.

Financial Strength:
The company’s total assets primarily consist of fixed asset investments valued at approximately £13 million, which appear stable and slightly increased year-on-year. However, these assets are offset by current liabilities exceeding £13 million, mostly loan capital owed to related parties (£12.8 million). Shareholders’ funds remain nominal, reflecting the company is highly leveraged with minimal retained earnings. The absence of external audit and reliance on related party funding suggests limited independent assurance and potential governance concerns.

Cash Flow Assessment:
Cash on hand is low (£227k) relative to current liabilities, and there is no trade debtor balance at June 2024, indicating limited receivables to generate cash inflows. The company pays significant interest on loans from related parties (£571k in the year), which pressures cash flows further. Working capital deficits are substantial, and with no employees, operational cash outflows are likely minimal, but debt servicing demands dominate liquidity concerns. The company’s ability to generate positive operating cash flow or refinance debt on favourable terms is uncertain.

Monitoring Points:

• Monitor changes in current liabilities, especially related party loans and interest accruals.
• Watch for any refinancing or injection of additional equity to improve liquidity.
• Review any changes in fixed asset valuations and potential impairments affecting net assets.
• Track timely filing of accounts and confirmation statements for signs of administrative or financial distress.
• Observe any director changes or related party transactions that might impact governance or financial stability.