WCG CHAPEL AND FIELD LIMITED

Executive Summary

WCG Chapel And Field Limited shows early-stage asset growth with investment in property and goodwill but faces liquidity challenges due to significant current liabilities and related party debts. The company’s ability to generate operating cash flow and manage working capital will be key to servicing its bank loans and short-term obligations. Conditional credit approval is recommended with close monitoring of cash flow, debt servicing, and related party transactions.

WCG CHAPEL AND FIELD LIMITED - Analysis Report

Company Number: 14554334

Analysis Date: 2025-07-29 20:02 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   WCG Chapel And Field Limited is a newly established private limited company (incorporated late 2022) operating in residential care for elderly and disabled persons. The company has built tangible and intangible fixed assets (notably property and goodwill) within its first two years, indicating investment in operational capacity. However, the current financials show a negative net current asset position (£-759k) and significant short-term liabilities (£1.48m), which may pressure liquidity. The substantial related party creditor balance (£1.31m owed to an associated company) further clouds independent financial strength. The presence of long-term bank loans (£1.44m) adds leverage risk. Management appears experienced and stable with directors controlling the company and a growing workforce (53 employees). The company’s ability to generate operating cash flows and reduce working capital deficits will be critical. Therefore, credit approval should be conditional on monitoring cash flow improvements, working capital management, and confirmation of sustainable earnings to service debts.

2. Financial Strength:

• Fixed assets total £2.45m, mainly land/property (£1.55m net) and goodwill (£899k net), reflecting acquisition or development of care facilities.
• Current assets £720k are outweighed by current liabilities £1.48m, resulting in a working capital deficit of £759k.
• Long-term liabilities include £1.44m in bank loans, increasing gearing and financial risk.
• Net assets stand at £251k, showing a positive but modest equity base relative to liabilities.
• Related party debt of over £1.3m is significant and should be scrutinized for repayment terms and impact on independent liquidity.
• The balance sheet suggests asset-backed financing but constrained short-term liquidity.

3. Cash Flow Assessment:

• Cash on hand of £437k is reasonable but must cover £1.48m short-term creditors, indicating potential cash flow strain.
• Debtors of £283k provide some receivables coverage but turnover and collection efficiency are unknown.
• Negative net current assets imply reliance on creditor funding or refinancing to meet obligations.
• No profit and loss data provided, but initial losses or break-even status can be inferred given the small retained earnings (£251k equity).
• Ongoing cash generation from operations is essential to reduce reliance on creditor funding and service bank loans.

4. Monitoring Points:

• Liquidity ratios: Current ratio and quick ratio improvements are critical.
• Operating cash flow trends: Confirm positive cash generation from care services.
• Related party creditor balance: Monitor repayment schedule and any restructuring.
• Debt servicing capacity: Interest coverage and principal repayment ability on £1.44m bank loans.
• Profitability metrics and margin trends: To validate sustainable earnings.
• Directors’ conduct and governance: Given related party transactions, ensure transparency and arm’s length terms.
• Employee growth and operational scalability as indicators of business expansion and risk profile.