Credit Assessment — REPLETE LIMITED (06377821)

SIC 56210 — Event catering | Total Exemption Full accounts | Year ended 31 May 2024

1. Credit Opinion: DECLINE

This is not a marginal case. The company is in administration, its registered office is the address of Quantuma Advisory Limited (the appointed administrators), and the last filed balance sheet shows net liabilities of £1,045,192 against share capital of £4. There is no credit proposition here — the question is only how existing or prospective exposure should be managed.

The grounds are cumulative and independently sufficient:

• Insolvent on any measure. Balance sheet insolvency has persisted for at least eight consecutive reporting years (negative equity every year from 2016 onward). The company also appears cash-flow insolvent: £151,622 of current assets against £1,064,616 of liabilities falling due within a year.
• Formal insolvency process. Administration supersedes ordinary credit analysis. Any unsecured claim would rank behind the administrator's fees, preferential creditors and ring-fenced balances, with recovery likely to be negligible.
• The accounts themselves flag doubt. The going concern note discloses "material uncertainties" and references entry into a company voluntary arrangement — a precursor that evidently did not hold.
• Filing non-compliance. Accounts are flagged overdue at Companies House, consistent with a business whose administrative functions have broken down.
• Related-party dependency. £478,589 owed to the parent, plus £197,640 to a connected pension scheme, plus £76,500 of annual management charges extracted to the parent. Value has been systematically moved out of the borrowing entity.

No facility should be granted. Where an existing exposure exists, it should be treated as impaired and referred to the bank's recoveries/business support function immediately.

2. Financial Strength

Balance sheet: Effectively no equity cushion. The P&L reserve is negative to the full extent of the liabilities, meaning every pound of creditor money is funding trading losses already incurred. Fixed assets of £157,747 are dominated by leasehold improvements (£129,560) — specialist fit-out with minimal realisable value in a break-up, and heavily depreciated. Stock of £38,610 is perishable/consumable catering inventory and worth little outside a going concern.

Earnings trajectory: The movement in reserves implies a loss of approximately £122,308 in FY2024, following a loss of roughly £114,700 in FY2023. Prior history shows a loss of c.£587,000 in FY2021. This is a business that has consumed capital for most of a decade; the only positive year in the series (FY2022, c.+£158,000) looks anomalous against the trend.

Creditor structure — the critical weakness:

• Trade creditors £248,554 (up 23% year-on-year)
• Amounts owed to group undertakings £478,589 (up 22%)
• Other creditors £315,745 (up 41%)
• Taxation and social security £21,728
• Non-current other creditors £289,945

Total liabilities have grown from £821,942 (FY2020) to £1,354,561 (FY2024) — a 65% increase — while the asset base has barely moved. This is the signature of a business funding operating losses through creditor stretch, not growth. The 41% jump in "other creditors" and the 23% rise in trade creditors in the final year are classic pre-insolvency indicators: suppliers tightening terms, arrears accumulating.

Off-balance-sheet exposure: Non-cancellable operating lease commitments of £2,148,225 — roughly fourteen times current assets. In an administration this becomes a landlord claim for the full unexpired term, and it alone would swamp any asset realisations.

Data note: the summarised financial history records total assets of £151,622 for FY2024, which reconciles to current assets only. The filed balance sheet shows a further £157,747 of tangible fixed assets, giving total assets of approximately £309,369. The conclusion is unaffected.

3. Cash Flow Assessment

Liquidity is critically inadequate. A current ratio of 0.14x means the company holds fourteen pence of near-term resources for every pound due within twelve months. Even on the most generous reading — full recovery of stock at book and all debtors collected — the company could meet barely one-seventh of its current obligations.

Cash of £45,060 is not a strength. It rose from £11,013, but that increase was funded by a £217,353 expansion in current liabilities, not by trading. The bank should read this as creditor-funded liquidity, which reverses the moment suppliers press or a statutory demand lands. Note also that trade debtors are carried at nil in FY2024 (FY2023: £1,322) despite a catering operation with 16 employees — either receipts are immediate/cash-based or the debtor book has been factored or written off. Either way there is no receivables book to borrow against.

Working capital is negative to the tune of £912,994 and deteriorated by £167,495 in the year. There is no realistic prospect of trading out of a deficit of that scale; it would require a multi-year profit performance the company has never demonstrated.

Cash flow coverage: with a £122,308 loss and no visible EBITDA generation, there is no debt service capacity. Interest and capital repayments would have to be met from further creditor stretch or shareholder support — neither of which is a credit facility.

Related-party leakage: £76,500 of management charges paid to the parent in FY2024 (FY2023: £51,000), plus £57,300 of lease payments to a connected pension scheme. In a distressed scenario these are the first items a lender would challenge as preference or value extraction. The intercompany balance of £478,589 is deeply subordinated in practice and unlikely to be repaid.

4. Monitoring Points

For live exposure management and for any future assessment of a successor or connected entity:

1. Administrator's progress reports — track estimated realisations versus creditor claims, prescribed-part expenses, and the outcome for unsecured creditors. Establish the bank's ranking and whether any fixed or floating charge is held over specific assets.
2. Pre-pack / connected-party sale — establish whether the business or assets were sold to a vehicle connected to Xxxxxxxname shown to subscribers or Xxxxxxxname shown to subscribers. If so, review the valuation, marketing evidence and any continuity of the bank's security. This is the single most important line of enquiry.
3. Statutory arrears — £21,728 of PAYE/NIC/VAT. Confirm whether a time-to-pay arrangement existed and whether HMRC has preferential or secondary preferential status in the administration.
4. Pension scheme exposure — £197,640 owed to a scheme of which the directors are trustees. Verify whether any employer-related investment or preferential treatment arises, and whether The Pensions Regulator has any interest.
5. Lease liabilities — £2,148,225 of commitments. Confirm whether any lease is guaranteed by the company, by a connected party, or personally by the directors. Personal guarantees are the most likely route to any recovery.
6. Director conduct — Xxxxxxxname shown to subscribers and Xxxxxxxname shown to subscribers remain recorded as current officers. Check the Insolvency Service disqualification register and any wrongful trading or misfeasance findings arising from the administration. A track record of trading while insolvent is directly relevant to any future lending to connected parties.
7. Filing compliance — accounts overdue. If the company is later restored or a successor entity is presented for facilities, treat any filing lateness as a governance red flag requiring explanation.

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