WOOD END ESTATES LIMITED

Executive Summary

Wood End Estates Limited exhibits rapid asset growth in the property sector but carries significant short-term liabilities causing negative working capital and minimal net equity. The company’s financial strength is constrained by liquidity risks and high leverage. Credit approval is conditional on evidence of sustainable cash flow and enhanced working capital management to mitigate repayment risk.

WOOD END ESTATES LIMITED - Analysis Report

Company Number: 13736555

Analysis Date: 2025-07-29 19:00 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Wood End Estates Limited is an active micro-entity engaged in real estate letting and trading, with a short operational history since late 2021. The company shows significant growth in fixed assets from £485k to £2.5M in the latest 2024 financial year, indicating property acquisitions or capital investments. However, the current liabilities have also risen sharply to over £2 million, creating a substantial net current liability position and very modest net assets (£63k). This suggests reliance on long-term financing and potential liquidity strain. Credit approval is conditional on the company demonstrating improved working capital management and servicing capacity. Given the nature of property assets (likely illiquid), scrutiny of debt repayment terms and cash flow projections is advised before extending credit.

2. Financial Strength:
   The balance sheet shows fixed assets of £2.52 million, which comprise the bulk of total assets, consistent with real estate operations. Current assets remain low (£132k), mostly cash or receivables, while current liabilities are high at £2.07 million, resulting in negative working capital of £386k. Non-current creditors of £2.07 million indicate substantial long-term debt or mortgages. Net assets have declined from £98k in 2023 to £63k in 2024, reflecting either asset revaluation or retained losses. Overall, the company has a leveraged capital structure with limited liquidity buffer. The equity base is minimal relative to liabilities, which reduces financial resilience to adverse market conditions.

3. Cash Flow Assessment:
   Current liabilities exceed current assets, indicating potential short-term liquidity risk. The company’s ability to meet short-term obligations depends heavily on cash inflows from rental income or property sales, which are not detailed here. The presence of large long-term debt suggests ongoing interest and principal repayments that may pressure cash flows. The average headcount is only two employees, which keeps operating costs low, but working capital deficits require careful monitoring. Without an audit or profit and loss statement, cash generation capacity cannot be fully assessed, reinforcing the need for management cash flow forecasts before credit extension.

4. Monitoring Points:

• Working capital trends: Monitor changes in current assets versus current liabilities to assess liquidity improvement.
• Debt servicing: Review repayment schedules and interest coverage ratios to ensure timely debt obligations are met.
• Asset valuations: Watch for impairments or revaluations of property holdings that could affect net asset value.
• Rental income stability: Confirm consistent cash inflows from property lettings or sales activity.
• Directors’ conduct and governance: Both directors hold significant control and have relevant property management experience; ongoing oversight of governance standards is recommended.