ADEL PROFESSIONAL LIMITED
Company number 06370475 · 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: ADEL PROFESSIONAL LIMITED
1. Credit Opinion: CONDITIONAL (Bordering on DECLINE for unsecured facilities)
Reasoning: The company presents material credit concerns centred on a severe liquidity deficit and negative working capital. Cash reserves of £219 against current liabilities of £1.52M represent an acute inability to meet short-term obligations from liquid resources. While net assets appear healthy at £711k, this is overwhelmingly anchored in illiquid tangible assets (property at £1.44M net book value) and stock (£931k), neither of which can readily service debt. The P&L reserve declined by £99,805 in the latest year, indicating trading losses. Any credit facility would require robust security and significant conditions. Unsecured lending should be declined.
2. Financial Strength
Balance Sheet Composition (FY2025):
| Category | Amount | % of Total |
|---|---|---|
| Tangible Fixed Assets | £1,528,336 | 57.8% |
| Stocks | £930,634 | 35.2% |
| Debtors | £185,208 | 7.0% |
| Cash | £219 | 0.01% |
| Total Assets | £2,644,497 | 100% |
Key Observations:
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Asset Quality Concern: The balance sheet is heavily illiquid. Property (£1,439,250 NBV) and stock (£930,634) together represent 89.4% of total assets. Neither provides ready debt service capacity.
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Equity Trajectory: Net assets improved substantially from the 2023 trough (£113k) to £711k in 2025, but this appears driven by the 2024 revaluation/adjustment. The latest year shows deterioration – P&L reserves fell from £650,842 to £551,037, indicating a loss of approximately £99,805.
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Gearing: Total liabilities of £1.52M (current) plus £286k (non-current) plus £125k (provisions) = £1.93M against equity of £711k yields a debt-to-equity ratio of approximately 2.7:1. This is elevated for a wholesale trading business.
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Fully Amortised Goodwill: £1,438,500 of goodwill has been written down to zero, suggesting prior acquisitions have not delivered sustained value.
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Offshore Ownership: The ultimate controlling party is Todah Holdings Limited (Belize). This structure introduces opacity regarding beneficial ownership and potential complications in enforcement or guarantee recovery.
3. Cash Flow Assessment
Working Capital Position:
| Metric | FY2025 | FY2024 | Movement |
|---|---|---|---|
| Current Assets | £1,116,061 | £1,153,072 | (£37,011) |
| Current Liabilities | £1,521,460 | £1,460,223 | £61,237 |
| Net Current Assets/(Liabilities) | (£405,399) | (£307,151) | (£98,248) |
| Cash | £219 | £211 | £8 |
Critical Findings:
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Negative Working Capital Worsening: The deficit has deepened from £307k to £405k – a 32% deterioration. The company is technically insolvent on a current ratio basis (0.73:1).
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Cash Starvation: Cash of £219 is operationally insignificant. The company is entirely dependent on trade creditor accommodation and bank facilities to fund day-to-day operations.
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Trade Creditor Dependency: Trade creditors of £1,139,721 represent 74.9% of current liabilities. This suggests the company is stretching supplier payments to preserve cash – a common distress indicator. If key suppliers tighten terms, the business faces immediate liquidity crisis.
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Secured Debt Coverage: Existing secured borrowings total £464,826 (current: £227k bank + £20k HP; non-current: £238k loans + £49k HP). These are secured on company assets, significantly reducing available collateral for new lenders.
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Stock Conversion Risk: Stock represents 83% of current assets. In the cosmetics/perfume wholesale sector, stock obsolescence risk is material. Any impairment would directly erode the already-weak working capital position.
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Operating Lease Obligations: £246,516 in committed lease payments adds further fixed cost burden.
4. Monitoring Points
| Metric | Current Status | Watch Threshold | Risk Level |
|---|---|---|---|
| Current Ratio | 0.73:1 | <1.0:1 | 🔴 Critical |
| Cash Position | £219 | <£50,000 | 🔴 Critical |
| Trade Creditor Days | Elevated (estimated) | Increasing trend | 🔴 High |
| Net Assets Trend | Declining (FY2025) | Any further decline | 🟡 Elevated |
| P&L Reserve | £551,037 | Below £400k | 🟡 Monitor |
| Stock Turnover | Unknown – assess | Slowing conversion | 🟡 Elevated |
| Secured Debt/Assets | ~31% | Above 50% | 🟢 Acceptable |
Specific Monitoring Requirements:
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Quarterly Management Accounts: Required to track trading performance and cash flow. The latest P&L reserve decline must not continue.
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Aged Creditor Report: Monitor trade creditor ageing. If days payable exceed 90+ days consistently, this signals worsening supplier confidence.
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Stock Provisioning: Verify stock valuation methodology and any impairment charges. Cosmetics/perfume stock carries obsolescence and shelf-life risk.
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Related Party Transactions: Clarify nature of "other debtors" (£124,592) and "other creditors" balances. Related party balances can obscure true financial position.
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Provisions: £125,000 in provisions requires explanation – nature, timing, and likelihood of outflow.
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Offshore Structure: Obtain transparency on Todah Holdings Limited (Belize) – beneficial owners, related party lending, and any upstream cash flow obligations.