WILLOW TREE SUPPORT LIMITED

Executive Summary

Willow Tree Support Limited has demonstrated significant financial improvement, moving from negative equity to a strong net asset position supported by tangible assets and cash reserves. The company’s liquidity and working capital are robust, though the recent long-term debt introduces a leverage consideration. Credit approval is recommended with conditions to monitor debt servicing and maintain liquidity in a regulated residential care sector.

WILLOW TREE SUPPORT LIMITED - Analysis Report

Company Number: 12395892

Analysis Date: 2025-07-29 15:50 UTC

1. Credit Opinion: APPROVE with conditions

Willow Tree Support Limited shows a solid improvement in financial health and liquidity over recent years, with net assets growing from a negative position in 2021 to a strong positive £198k in 2025. The company has no overdue filings, demonstrating compliance and good governance. However, the introduction of a £168k long-term liability in 2025 requires monitoring to ensure repayment capacity. The company operates in residential care, a stable sector but sensitive to regulatory changes and funding pressures. Given the improving balance sheet and cash position, credit approval is recommended with conditions that the company maintains current liquidity levels and meets debt servicing obligations on the new long-term creditor.

2. Financial Strength:

The balance sheet reflects a robust turnaround from a negative net asset position (£-41.7k) in 2021 to £198k net assets in 2025, supported by acquisition of tangible fixed assets (£240k land and buildings) and retained earnings. Current liabilities are manageable relative to cash balances, with a net current asset position of £126k. The equity base is small (£2 share capital) but strengthened by retained earnings. The introduction of a £168k creditor due after one year introduces leverage risk but is currently well covered by total assets (£366k). Overall, the company shows improving capitalization and asset backing.

3. Cash Flow Assessment:

Cash at bank increased significantly from £5.8k in 2021 to £170k in 2025, reflecting improving liquidity. Current liabilities are £44k, well covered by cash, resulting in a strong net current asset position (£126k). The company’s working capital is healthy, supporting operational needs. The presence of long-term debt of £168k suggests future cash outflows for debt service; however, current cash reserves provide a buffer. Monitoring of cash flow generation and adequacy to cover debt commitments will be critical.

4. Monitoring Points:

• Debt servicing: Review quarterly cash flow to confirm timely repayment of the £168k long-term creditor.
• Profitability and cash generation: As no income statement is filed, assess interim management accounts to verify ongoing profitability.
• Working capital management: Monitor current liabilities and cash balances to maintain positive liquidity.
• Regulatory environment: Watch for changes in residential care funding and compliance costs that may impact cash flow.
• Directors’ conduct and governance: No adverse records noted; maintain oversight of director stewardship.