WOODHAM ENTERPRISES LIMITED
Company number 04017037 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Credit Analysis: WOODHAM ENTERPRISES LIMITED
1. Credit Opinion: CONDITIONAL APPROVE
Woodham Enterprises demonstrates a strong and consistently improving financial position, with net assets growing from £617k (2016) to £4.76M (2025)—approximately 7.7x growth over nine years. The company operates in a recession-resilient sector (residential care) and maintains conservative leverage with total liabilities of just £1.75M against net assets of £4.76M. However, conditions apply due to: (a) a concerning near-doubling of debtors from £1.27M to £2.72M in the latest year, (b) key-person risk from sole director/majority shareholder Victor Morris, and (c) unaudited accounts under the small companies regime which limit verification depth.
Conditions for full approval: - Satisfactory explanation and verification of the £1.45M debtor increase - Confirmation that debtors are not significantly related-party balances - Personal guarantee from Mr. Morris for facilities exceeding £250k - Updated management accounts to confirm trading performance continues in line with trends
2. Financial Strength
Balance Sheet Summary (Year Ending 18 June 2025)
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Tangible Fixed Assets | £2,777,692 | £2,483,412 | +11.9% |
| Debtors | £2,724,445 | £1,267,143 | +115.0% |
| Cash | £1,481,785 | £2,215,868 | -33.1% |
| Current Liabilities | (£464,899) | (£365,451) | +27.2% |
| Long-term Liabilities | (£1,747,143) | (£1,648,219) | +6.0% |
| Net Assets | £4,758,573 | £3,952,753 | +20.4% |
| Shareholders' Funds | £4,758,573 | £3,952,753 | +20.4% |
Key Ratios:
| Ratio | 2025 | 2024 | Assessment |
|---|---|---|---|
| Current Ratio | 9.05x | 9.53x | Excellent |
| Gearing (Liabilities/Net Assets) | 0.37x | 0.42x | Conservative |
| Net Asset Growth | 20.4% | 35.2% | Strong |
| Tangible Net Worth | £4.76M | £3.95M | Substantial |
Analysis:
The balance sheet is fundamentally strong. Net assets have grown every year for the past decade, demonstrating consistent profitability retained within the business. The P&L reserve increased by approximately £806k in the latest year (£4,753,573 - £3,947,753), indicating healthy trading performance.
Gearing is conservative at 0.37x (total liabilities to net assets), meaning the company has significant headroom for additional borrowing if required. The property-heavy asset base (£2.78M in tangible assets, likely care home properties) provides solid collateral for secured lending.
Concerns:
- Debtors escalation: The 115% increase in debtors to £2.72M is disproportionate to the overall asset growth and warrants investigation. In the care sector, this often reflects local authority payment delays or related-party balances.
- Cash decline: Cash fell by £734k while debtors increased by £1.46M—this pattern suggests potential cash collection issues or a deliberate shift in payment terms.
- Provision: A new provision of £13,307 appeared in 2025, which could indicate an anticipated bad debt or contractual liability.
3. Cash Flow Assessment
Working Capital Position:
| Metric | 2025 | 2024 |
|---|---|---|
| Current Assets | £4,206,230 | £3,483,011 |
| Current Liabilities | (£464,899) | (£365,451) |
| Net Current Assets | £3,741,331 | £3,117,560 |
| Current Ratio | 9.05x | 9.53x |
Liquidity Assessment: Excellent. The current ratio of 9.05x indicates the company can comfortably meet short-term obligations nearly nine times over. Net current assets of £3.74M provide a substantial buffer.
Cash Flow Dynamics:
The cash position at £1.48M remains healthy in absolute terms, representing approximately 21% of total assets. However, the £734k decline from 2024 warrants monitoring. Potential explanations include: - Capital expenditure on tangible assets (£310,639 additions) - Increased debtor funding (working capital lock-up) - Possible loan repayments or director-related transactions
Debt Service Capacity:
With retained profits of approximately £806k added in the year and minimal current liabilities (£465k), the company has ample capacity to service additional debt obligations. The long-term liabilities of £1.75M appear manageable given the asset base and profitability.
Working Capital Concern:
The debtor days calculation requires turnover data (not filed), but the absolute debtor level of £2.72M relative to the business size suggests either: 1. Significantly extended credit terms to local authorities (common in care sector) 2. Related-party receivables 3. Potential impairment risk if collection is uncertain
4. Monitoring Points
| Priority | Metric | Target/Threshold | Rationale |
|---|---|---|---|
| HIGH | Debtor levels and aging | Debtor growth ≤ revenue growth; no related-party concentration >20% | 115% debtor increase is disproportionate and requires explanation |
| HIGH | Cash position | Maintain minimum £1M cash | Cash declined £734k; further erosion would signal distress |
| MEDIUM | Local authority payment trends | Monitor debtor days trend | Care sector exposed to LA funding pressures |
| MEDIUM | Key person contingency | Document succession/management continuity plan | Sole director with >75% control creates key-person risk |
| MEDIUM | Long-term liability composition | Understand nature and terms of £1.75M LT debt | Necessary for assessing true leverage and repayment commitments |
| LOW | Employee numbers | Monitor for significant declines | Dropped from 32 to 29; care quality and capacity implications |
| LOW | Regulatory compliance (CQC) | Maintain satisfactory rating | Care homes subject to CQC inspections; adverse findings impact viability |
| LOW | Tangible asset values | Annual property valuation review | £2.78M in property underpins balance sheet strength |
Additional Due Diligence Required:
- Debtor verification: Obtain debtor aging schedule and confirm no related-party concentrations
- Long-term liability breakdown: Understand terms, maturity profile, and security of £1.75M in long-term creditors
- Management accounts: Request interim management accounts to confirm 2025/26 trading performance
- Director's personal finances: Assess personal guarantee capacity given 100% ownership concentration
- CQC registration status: Verify regulatory compliance and current inspection ratings