VICTORIA HIRE (WHITSTABLE) LTD

Executive Summary

Victoria Hire (Whitstable) Ltd is a start-up in vehicle rental with a solid asset base but currently negative working capital and modest equity. Conditional credit approval is advised, contingent on improved liquidity and cash flow in the next year. Close monitoring of debtor collections and debt servicing is critical to mitigate risk.

VICTORIA HIRE (WHITSTABLE) LTD - Analysis Report

Company Number: 14784810

Analysis Date: 2025-07-20 11:52 UTC

1. Credit Opinion: CONDITIONAL APPROVAL. Victoria Hire (Whitstable) Ltd is a newly incorporated entity (April 2023) operating in the vehicle rental sector. The company has filed its first set of accounts showing a modest net asset base and a small positive retained profit after one year. However, it currently reports net current liabilities and relies on hire purchase financing, which increases debt service obligations. The directors appear experienced and local with no adverse records. Credit approval is recommended on a conditional basis, subject to monitoring improved liquidity and sustainable cash flow generation in the next 12 months.

2. Financial Strength: The balance sheet shows total fixed assets of £74,267, primarily motor vehicles acquired under hire purchase (£72,900 cost). Current assets stand at £117,584, mainly debtors (£107,572, including £76,000 owed by group undertakings) and modest cash (£10,012). Current liabilities total £127,704, resulting in net current liabilities of £10,120. Long-term liabilities consist of £47,055 in bank loans and hire purchase contracts. Shareholders’ funds are only £557, reflecting the early stage of the company. The gearing is relatively high due to hire purchase debt, but assets are tangible and operational.

3. Cash Flow Assessment: Cash at bank is limited (£10,012), and working capital is negative, indicating tight liquidity. The large debtor balance includes amounts owed by group companies, which may be more stable than trade receivables but still represent a potential risk for cash conversion timing. Hire purchase and loan commitments require regular servicing, which may pressure cash flows. The company reported a small profit (£4,517) after one year and paid dividends (£4,000), suggesting some capacity to generate earnings but caution is warranted as cash reserves remain low. Close monitoring of cash flow forecasts and debtor collections is essential.

4. Monitoring Points:

• Liquidity and working capital trends: watch for improvement in net current assets and cash balances.
• Debt servicing: ability to meet hire purchase and bank loan payments on time.
• Debtor aging and recoverability, especially amounts owed by group companies.
• Profitability trajectory in subsequent accounting periods to assess sustainable earnings.
• Any changes in director composition or external financing arrangements.
• Compliance with filing deadlines to avoid regulatory or reputational risks.