FASSFERN FORESTRY LIMITED
Company number 06508591 · 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: FASSFERN FORESTRY LIMITED
1. Credit Opinion: CONDITIONAL
Rationale: The company demonstrates a remarkable turnaround trajectory from near-insolvency in 2017-2019 (net assets of £238-£2,737) to a net asset position of £183,384 in 2025. However, several credit concerns warrant conditions: net current assets are perilously thin at £3,205, the business carries a significant Bounce Back Loan (£51,482 outstanding), provisions of £67,245 require clarification, and cash has shown extreme volatility historically. Credit facilities should be considered with appropriate security and covenants.
2. Financial Strength
Balance Sheet Composition (FY2025):
| Category | £ | Commentary |
|---|---|---|
| Fixed Assets | 276,730 | Primarily plant & machinery (£275,240) - good collateral value |
| Current Assets | 141,495 | Debtors £86,367 + Cash £55,128 |
| Current Liabilities | 138,290 | Including BBL £22,176 due within 1 year |
| Net Current Assets | 3,205 | Dangerously thin working capital buffer |
| Long-term Creditors | 29,306 | BBL £29,306 due 1-2 years |
| Provisions | 67,245 | Material - likely tax-related |
| Net Assets | 183,384 | Solid overall position |
Gearing Analysis: - Total liabilities to net assets: 138,290 + 29,306 + 67,245 = £234,841 vs net assets of £183,384 - Leverage ratio approximately 1.28x - moderate but manageable - Share capital minimal at £100 - business built entirely on retained earnings
Equity Trajectory (remarkable recovery):
| Year | Net Assets | Year-on-Year Change |
|---|---|---|
| 2017 | £1,418 | - |
| 2018 | £2,737 | +£1,319 |
| 2019 | £238 | -£2,499 |
| 2020 | £14,826 | +£14,588 |
| 2021 | £131,876 | +£117,050 |
| 2022 | £176,241 | +£44,365 |
| 2023 | £202,569 | +£26,328 |
| 2024 | £178,612 | -£23,957 |
| 2025 | £183,384 | +£4,772 |
The 2024 decline from the 2023 peak requires investigation - potentially related to asset disposals (note shows £30,000 of disposals in FY2025) or trading losses. The 2021 spike coincides with COVID-era support measures and the Bounce Back Loan.
3. Cash Flow Assessment
Liquidity Position: - Current ratio: 141,495 ÷ 138,290 = 1.02x (barely covers current obligations) - Quick ratio (excluding stock): 1.02x (no stock held) - Cash represents 39% of current assets - reasonable but volatile
Cash History (demonstrating volatility):
| Year | Cash | Assessment |
|---|---|---|
| 2021 | £117,134 | Inflated by BBL proceeds |
| 2022 | £40,105 | Normalizing |
| 2023 | £0 | Critical - zero cash |
| 2024 | £19,711 | Recovering |
| 2025 | £55,128 | Improved |
The 2023 zero-cash position is a significant red flag for a trading business. The recovery to £55,128 in 2025 is positive but the trajectory must be sustained.
Working Capital Concerns: - Net current assets of only £3,205 provide minimal buffer - Trade debtors of £79,398 (up from £73,307) - collection risk and potential bad debts - Director loan of £18,027 outstanding - subordinated but represents cash outflow when repaid - Employee headcount reduced from 7 to 5 - may indicate cost-cutting or capacity constraints
Debt Service Obligations: - BBL due within 1 year: £22,176 - BBL due 1-2 years: £29,306 - Total BBL outstanding: ~£51,482 - Annual BBL repayment approximately £22,000-£29,000
4. Monitoring Points
| Metric | Target/Watch | Current Status |
|---|---|---|
| Net Current Assets | Minimum £20,000 | ⚠️ £3,205 - CRITICAL |
| Cash Position | Minimum £30,000 | ✅ £55,128 |
| Current Ratio | Minimum 1.2x | ⚠️ 1.02x - BELOW TARGET |
| Trade Debtors Trend | Stable/declining | ⚠️ Increasing (+8.3% YoY) |
| Director Loan | Reducing | ✅ Down from £19,534 to £18,027 |
| Employee Count | Stable | ⚠️ Down from 7 to 5 |
Key Questions for Management: 1. Composition of the £67,245 provisions - tax, legal, or operational? 2. Explanation for 2023 zero cash position and 2024 net asset decline 3. Reason for employee headcount reduction 4. Trade debtor quality and aging analysis 5. Capital expenditure plans (£64,497 additions in FY2025 suggests ongoing investment) 6. Impact of BBL repayment schedule on future cash flows
Recommended Covenants: - Minimum net current assets of £15,000 - Cash balance not to fall below £20,000 - No further director loans without bank consent - Security over plant & machinery (NBV £276,730) - Personal guarantee from name shown to subscribers