Company Number: 12993150

Analysis Date: 2025-07-20 12:51 UTC

1. Credit Opinion: DECLINE
   Hapstead Farm C.I.C. exhibits persistent negative net assets and net current liabilities over recent years, indicating a capital deficiency and working capital shortfall. Despite modest growth in turnover, profitability is minimal (£249 in 2023) and insufficient to meaningfully improve the balance sheet. The company operates with a very small asset base and high current liabilities, which raises concerns about its ability to meet short-term obligations and service any debt. The absence of director remuneration and reliance on community support suggest limited cash generation capacity. Given these factors, credit risk is high and approval for unsecured lending or increased credit facilities is not recommended at this time.

2. Financial Strength:
   The balance sheet shows total net liabilities of £2,646 at 30 November 2023, a slight improvement from prior years but still negative. Fixed assets are minimal (£420), and current liabilities (£18,280) exceed current assets (£15,214), yielding a negative working capital position of £3,066. Persistent net asset deficits over four years indicate ongoing capital erosion. The company’s equity is comprised entirely of accumulated losses, with no shareholder funds as it is limited by guarantee with no share capital. The limited tangible asset base and negative equity position reflect weak financial resilience.

3. Cash Flow Assessment:
   Cash at bank is low at £2,613, covering only a small fraction of current liabilities. Debtors have decreased to £1,601, which may limit short-term liquidity. Stock levels remain constant at £11,000, tying up working capital in inventory that may not be easily liquidated. The company’s operating profit margin is negligible, suggesting limited internal cash generation. Negative net current assets indicate reliance on external funding or delayed creditor payments to finance operations. Overall, liquidity constraints pose a risk to ongoing operations and debt servicing capability.

4. Monitoring Points:

• Trend in net current assets and net liabilities: Watch for further improvements or deterioration in working capital and equity positions.
• Operating cash flow and profitability: Monitor for sustainable positive cash flow to support operations.
• Debtor collections and stock turnover: Assess efficiency in converting receivables and inventory into cash.
• Creditors’ payment terms and any overdue liabilities: Track creditor aging to identify liquidity stress.
• Any changes in community support or funding arrangements given the company’s CIC status.
• Director changes or remuneration developments as indicators of management stability and financial stewardship.