21 SIX PLATFORM LIMITED

Executive Summary

21 SIX PLATFORM LIMITED is currently experiencing significant financial distress, marked by negative net assets and a severe working capital deficit, indicating liquidity and solvency challenges. While the company holds substantial fixed assets and forecasts a return to profitability, urgent actions to improve cash flow, manage liabilities, and strengthen the balance sheet are essential to stabilize and restore financial health.

21 SIX PLATFORM LIMITED - Analysis Report

Company Number: 13157419

Analysis Date: 2025-07-20 17:27 UTC

Financial Health Assessment for 21 SIX PLATFORM LIMITED

---

1. Financial Health Score: D (At Risk)

Explanation:
The company shows clear signs of financial distress, primarily characterized by negative net assets and significant working capital deficits. These "symptoms" indicate a fragile financial state that needs close monitoring and corrective actions to avoid further deterioration or potential insolvency. However, the directors have indicated a positive profit forecast and a going concern basis, which suggests some hope for recovery if management strategies are effectively implemented.

---

2. Key Vital Signs

Metric	2023 Value	Interpretation
Net Assets (Shareholders’ Funds)	-£372,176	Negative net assets signify liabilities exceed assets; unhealthy balance sheet "pulse."
Net Current Assets (Working Capital)	-£2,825,603	Severe working capital deficit; current liabilities far exceed current assets, indicating liquidity stress and potential cash flow problems.
Fixed Assets	£2,453,427	Significant long-term investments, mainly in unlisted investments (£2.4M), indicating capital tied up in non-liquid assets.
Current Assets	£1,146,762	Includes £16,819 cash and £1.13M debtors; cash level is low relative to liabilities, possibly indicating tight cash flow.
Current Liabilities	£3,972,365	High short-term obligations, raising concern about ability to meet immediate debts.
Cash on Hand	£16,819	Very low cash reserves relative to liabilities; a "low pulse" in liquidity terms.
Debtors	£1,129,943	Large amount owed to the company, but realization risk exists; delays in collections could worsen cash flow.
Share Capital	£1	Minimal equity base, indicating reliance on external funding or loans.
Employee Numbers	43 (Average in 2023)	Increased headcount from 9 in 2022 to 43 in 2023; higher operational costs likely.

---

3. Diagnosis

The company’s financial "vital signs" reveal a condition akin to "financial distress syndrome." The negative net assets and substantial working capital deficit point to a "heart struggling to pump" sufficient liquidity through the business. Despite holding significant fixed assets, these are largely illiquid investments which cannot be quickly converted to cash to meet short-term liabilities.

The dramatic increase in current liabilities from £873k in 2022 to nearly £4M in 2023, without a proportionate increase in liquid assets, signals "symptoms of acute cash flow strain." The cash on hand is minimal and insufficient to cover immediate obligations. The large debtor balance, while a potential source of inflow, may be suffering from slow collection or credit risk, further exacerbating liquidity issues.

The company’s loss and negative reserves, though concerning, are somewhat mitigated by management’s forecast of a profitable 2024 and the directors’ opinion supporting the going concern assumption. However, this prognosis depends heavily on the company’s ability to improve operational cash flow, reduce liabilities, or secure additional funding.

The increase in employees suggests expansion or scaling, which might improve revenue in the future but also currently adds to the "metabolic demand" of the business in terms of expenses.

---

4. Recommendations

To improve its financial wellness and stabilize the business, 21 SIX PLATFORM LIMITED should consider the following actions:

• Improve Liquidity ("Boost the Heartbeat"):

  • Accelerate debtor collections to convert receivables into cash faster. Consider stricter credit control policies or offering early payment discounts.
  • Review and negotiate current liabilities to extend payment terms or reduce amounts payable where possible.
  • Increase cash reserves by managing operating expenses tightly or seeking short-term financing facilities.

• Asset Optimization ("Mobilize the Reserves"):

  • Evaluate the £2.4M investment assets for potential partial realisation or restructuring to improve liquidity.
  • Avoid further capital expenditure until liquidity improves.

• Cost Management ("Reduce Metabolic Stress"):

  • Assess the increase in staff costs and operational expenses to ensure scaling aligns with revenue generation.
  • Implement cost control measures without compromising growth initiatives.

• Capital Structure Review ("Strengthen the Skeleton"):

  • Explore options for equity injection or shareholder loans to shore up the balance sheet and improve net assets.
  • Engage with existing shareholders (notably Platform Media Holdings Limited and 21 Six Investments Limited) for possible financial support.

• Regular Monitoring and Forecasting ("Monitor Vital Signs"):

  • Establish monthly cash flow forecasting and scenario planning to anticipate liquidity issues early.
  • Prepare contingency plans for adverse outcomes.

• Transparency and Communication:

  • Maintain clear communication with creditors and investors about the company’s turnaround plans to preserve confidence.

---