ZESTING PROPERTIES LIMITED

Executive Summary

Zesting Properties Limited shows persistent negative net assets and a large working capital deficit driven by an unsecured loan repayable on demand. The company’s liquidity position is weak, with minimal cash and high current liabilities, raising concerns about its ability to service debt. Without evidence of capital support or improved cash flow, credit approval is not recommended at this time.

ZESTING PROPERTIES LIMITED - Analysis Report

Company Number: 13116225

Analysis Date: 2025-07-20 13:10 UTC

1. Credit Opinion: DECLINE

Zesting Properties Limited exhibits significant financial stress, with persistent net current liabilities of approximately £1.89 million and negative shareholders’ funds (£29,173 deficit as of November 2023). The company’s current liabilities exceed current assets by a large margin, indicating liquidity challenges and a weak working capital position. The unsecured, interest-free loan of nearly £3 million, repayable on demand, represents a substantial contingent liability that could be called in at any time, increasing credit risk. Despite the directors’ assertion of going concern, there is no evidence of income growth or improved liquidity, and the company has consistently reported net liabilities since inception in 2021. This weak financial profile, compounded by negative equity and high current liabilities, suggests inability to reliably service new or additional debt. Therefore, credit facilities should be declined unless substantial restructuring or capital injection is demonstrated.

2. Financial Strength:

• Fixed assets mainly consist of investment properties valued at approximately £1.86 million, representing the bulk of total assets.
• Current assets (£1.11 million) are largely debtors (£1.1 million) and minimal cash (£14.8k), indicating limited liquid resources.
• Current liabilities total £3.0 million, primarily comprised of an unsecured, interest-free loan repayable on demand (£2.99 million), demonstrating a heavy reliance on short-term financing.
• Negative net current assets (-£1.89 million) and net liabilities (-£29k) reveal an undercapitalised balance sheet and ongoing losses.
• Share capital is minimal (£1,000) with accumulated losses reflected in retained earnings of -£30,173.
• No audit has been conducted; valuations of investment properties are director-assessed, which may add some valuation uncertainty.

3. Cash Flow Assessment:

• Cash at bank is very low (£14,767), insufficient to cover current liabilities.
• Debtor balances are high but likely linked to rental income, which may or may not be collectible on time.
• The company relies heavily on an unsecured, interest-free loan repayable on demand, which poses a liquidity risk if called upon.
• Negative working capital position suggests the company does not have sufficient short-term resources to meet immediate obligations without refinancing.
• No detailed cash flow statements available, but the financial structure suggests cash flow insufficiency for debt servicing and operational needs without external support.

4. Monitoring Points:

• Watch for any changes in the status or repayment terms of the unsecured loan facility, as its recall could jeopardize liquidity.
• Monitor debtor ageing and collection performance to assess cash inflows reliability.
• Track rental income stability and occupancy rates of investment properties to evaluate operational cash flow.
• Observe any new capital injections or equity restructuring that may improve net asset position.
• Keep an eye on forthcoming financial filings, especially if there are material changes in asset valuations or liabilities.
• Review directors’ actions and company announcements for turnaround plans or refinancing efforts.