Investment Risk Analysis: MANGO PROPERTIES LTD (04032679)

1. Risk Rating: MEDIUM

Justification: The company demonstrates consistent profitability and growing net assets over a 10-year period, with a stable property portfolio. However, significant intercompany loans, high leverage relative to net assets, and an overdue confirmation statement elevate the risk profile above low. The absence of audited accounts (small company exemption) limits visibility into asset valuations and related-party governance.

2. Key Concerns

a) Concentration of Intercompany Receivables

Debtors total £1,117,855, of which £1,041,826 (93%) represents amounts owed by group undertakings. The accounts disclose £752,826 owed by YPE Limited and £289,000 by TSI Prop Co Ltd — both interest-free and repayable on demand. This represents a substantial concentration of the company's current assets in entities controlled by the same two directors. If those group companies experience financial distress, Mango Properties' working capital and effective liquidity would be severely impaired. The recoverability of these balances is not discussed in the filleted accounts.

b) Leverage and Long-Term Debt Profile

Total liabilities stand at £1,469,548 against net assets of £1,895,551, yielding a debt-to-equity ratio of approximately 0.78:1. Bank loans of £1,385,334 are predominantly due after more than five years (£1,382,964), which provides near-term breathing room but indicates a heavily mortgaged property portfolio. With tangible fixed assets of £2,051,540, the loan-to-value ratio on property is roughly 67%, which is acceptable but leaves limited headroom for further borrowing or absorption of property value declines.

c) Overdue Confirmation Statement

The confirmation statement was last made up to 3 September 2025 and is now overdue (next due 17 September 2026 — though the data flags it as overdue, suggesting the prior period's filing may be outstanding). This is a governance red flag, albeit minor in isolation, as it may indicate administrative neglect or a change in PSC/director details not yet reflected on the public register.

3. Positive Indicators

• Consistent Net Asset Growth: Net assets have grown from £646,967 (2015) to £1,895,551 (2024) — a near tripling over the decade, indicating sustained profitability and retention of earnings.
• Healthy Cash Position: Cash at bank has improved to £296,826 (2024) from £36,201 (2015), with year-on-year stability, suggesting adequate operating cash generation.
• Low Short-Term Creditor Burden: Current liabilities of £102,122 are modest relative to current assets of £1,414,681, yielding strong net current assets of £1,312,559 (though heavily skewed by intercompany receivables).
• Long-Established Entity: Incorporated in 2000 with over 24 years of trading history and no insolvency events.
• Stable Ownership and Management: Two director-shareholders (Xxxxxx Xxxxxxxxname shown to subscribers and Xxxxxx Xxxxxxxxname shown to subscribers) have maintained consistent control, and no director disqualification records are evident.
• Property Asset Base: Freehold land and buildings valued at £2,051,002 provide tangible backing for the company's equity position.

4. Due Diligence Notes

1. Intercompany Loan Recoverability: Investigate the financial health of YPE Limited and TSI Prop Co Ltd. Assess whether these entities have the means to repay £1,041,826 on demand, and whether any formal loan agreements or security arrangements exist beyond the disclosed terms.
2. Group Structure: The accounts reference a group, but Mango Properties files as a standalone entity. Obtain consolidated accounts if available to understand the overall financial position and cross-guarantees.
3. Property Valuation Methodology: Accounts are prepared under historical cost convention. Given the property portfolio's significance, consider whether a current market valuation would materially differ from book value — particularly relevant in the current UK commercial/residential property environment.
4. Director Loan Activity: Note 9 shows a loan to director Xxxxxx Xxxxxxxxname shown to subscribers of £47,343 that was repaid during the year. Review the full history of director loans and confirm compliance with the Companies Act 2006 (sections 197–214).
5. Confirmation Statement Overdue Status: Verify the current filing status with Companies House. If genuinely overdue, confirm whether PSC details or director changes are pending notification.
6. Profit & Loss Account Not Filed: As a small company filing filleted accounts, the P&L has not been delivered to the Registrar. Request the full accounts directly from the company to assess revenue trends, operating margins, and interest coverage.
7. Bank Loan Terms: Obtain details of the £1,385,334 in bank loans — interest rates, covenants, maturity profile, and security arrangements (likely charged against the property portfolio).
8. Related Party — Avocado Properties Ltd: £84,214 is owed to Avocado Properties Ltd. Clarify the relationship and terms, and whether this creates any dependency or contingent exposure.

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