3RD AVE. PROPERTIES LIMITED

1. Credit Opinion: CONDITIONAL

The company reports a positive and growing equity base, with net assets of £416,983 at 31 December 2025 (FY2024: £394,422), and long-term creditors have been materially reduced from £1,039,551 to £519,551. Short-term liquidity is adequate, with current assets of approximately double current liabilities. However, cash reserves have fallen materially over the last two years, total assets have contracted as the investment portfolio has declined in value, and the abridged accounts do not include a filed profit and loss account, which limits visibility on trading performance and debt service capacity.

Approval is conditional on: - receipt of recent management accounts, including a profit and loss account and cash flow statement; - clarification of the nature, liquidity and valuation of the £927,389 investment portfolio, which comprises most fixed assets; and - depending on facility size, appropriate security or a guarantee from the controlling shareholders.

2. Financial Strength

• Net assets have increased from £8,630 at FY2016 to £416,983 at FY2025, indicating sustained retention of profits.
• Called-up share capital is only £200, so the balance sheet is almost entirely funded by retained earnings and long-term liabilities.
• Fixed assets total £940,165, of which £927,389 is classified as investments and only £12,776 as tangible assets. This creates concentration risk if the investments are illiquid or subject to valuation volatility.
• Long-term creditors (due after one year) stand at £519,551, down from £1,039,551 in FY2024. The significant deleveraging has improved the balance sheet but appears to have consumed cash and investment assets.
• Provisions for liabilities have decreased from £48,909 to £35,609.
• Accounts are unaudited and abridged under the small companies regime; audit exemption was claimed under section 477 of the Companies Act 2006.
• The company is classified under SIC 96090 (other service activities), yet the balance sheet is dominated by investment assets rather than trading assets, suggesting an investment holding profile despite the company name.

3. Cash Flow Assessment

• Cash at bank and in hand: £64,253 (FY2025), down from £74,673 (FY2024) and £172,182 (FY2023).
• Net current assets: £31,978 (FY2025), down from £61,012 (FY2024), though still positive.
• Short-term creditors: £32,149, broadly equivalent to cash reserves, leaving limited headroom for unexpected outflows.
• Debtors are minimal (£126 per the balance sheet), indicating limited exposure to trade receivables.
• No cash flow statement is filed. Repayment capacity must be inferred from balance sheet movements; retained earnings increased by approximately £22,561 in FY2025, suggesting modest profitability.

4. Monitoring Points

• Quarterly management accounts, including profit and loss and cash flow.
• Trend in cash balances relative to short-term creditors.
• Composition, valuation and any impairment of the investment portfolio.
• Repayment profile and interest cost of the £519,551 long-term creditors.
• Any overdue filings or changes to the confirmation statement at Companies House.
• Debt service coverage if additional borrowing is requested.