ACE PROJECT PROPERTIES LIMITED

Executive Summary

Ace Project Properties Limited is a property-focused company with strong asset backing but shows liquidity challenges indicated by negative working capital and minimal cash reserves. While the company maintains positive equity, it should prioritize improving cash flow and reducing short-term liabilities to enhance financial resilience. Timely filing and stable asset values provide a foundation for recovery and growth.

ACE PROJECT PROPERTIES LIMITED - Analysis Report

Company Number: 13803489

Analysis Date: 2025-07-29 16:25 UTC

Financial Health Assessment of Ace Project Properties Limited

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1. Financial Health Score: C

Explanation:
Ace Project Properties Limited shows a mixed financial condition. While it owns a significant investment property asset (£624k), the company is experiencing a "symptom of distress" in its working capital with negative net current assets (~-£40k) and very low cash balance (£14). The equity position remains positive but stable (£144k). Overall, moderate financial health with some liquidity concerns but no immediate red flags of insolvency.

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2. Key Vital Signs

Metric	2023 Figure	Interpretation
Investment Property (Fixed Assets)	£624,302	Represents core asset base; stable value, no revaluation this year. High asset backing.
Current Assets (Cash + Debtors)	£11,899	Very low cash (£14) and moderate debtors (£11,885). Indicates limited liquid resources for day-to-day needs.
Current Liabilities	£52,477	Short-term obligations significantly higher than current assets, leading to negative working capital.
Net Current Assets (Working Capital)	-£40,578	Negative figure signals potential liquidity strain; company may struggle to cover short-term liabilities.
Long-Term Borrowings	£439,843	Substantial secured bank loan with repayment beyond 5 years; long-term debt burden is considerable.
Net Assets (Equity)	£143,881	Positive equity sustained mainly by revaluation reserve (£143,750); indicates capital buffer.
Retained Earnings	£31	Negligible retained profits; company not generating substantial earnings retained in business.
Cash on Hand	£14	Critically low cash availability; "weak pulse" on liquidity.
Director Loans (Debtors)	£11,885	Amount owed by director as debtor, repaid by Sept 2024; somewhat unusual but short-term asset.

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3. Diagnosis

Ace Project Properties Limited is primarily a property holding company with a significant investment property as its main asset. The "healthy heart" of the business is the stable valuation of this asset, which underpins the company's net worth. However, the company exhibits "symptoms of liquidity distress" due to persistently negative working capital and almost negligible cash reserves. Current liabilities exceed short-term assets by over £40k, posing a risk to meeting immediate obligations without resorting to borrowing or asset sales.

The long-term bank loan of £440k, secured against company assets, is a heavy financial burden but structured for repayment beyond five years, easing immediate pressure. The equity position remains positive, primarily due to the revaluation reserve, but retained earnings are minimal, indicating limited profitability or reinvestment.

The director loans noted as debtors are a temporary asset but reliance on such arrangements can be a "warning sign" of thin operating cash flow. The company has timely filed accounts and returns, suggesting good administrative "health."

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4. Recommendations

To improve financial wellness and strengthen the company's financial "vital signs," the following actions are advised:

• Improve Liquidity: Focus on increasing cash reserves to alleviate negative working capital. This may involve negotiating better debtor terms, accelerating collections, or reducing short-term liabilities where possible.

• Cash Flow Management: Implement tighter cash flow forecasting and controls to avoid liquidity crunches. Consider short-term financing options if necessary but ensure cost-effectiveness.

• Profitability Enhancement: Although the company is asset-backed, efforts to generate operational profits or rental income (if applicable) should be increased to build retained earnings and reduce reliance on director loans.

• Debt Monitoring: Maintain regular dialogue with lenders to manage long-term debt obligations prudently. Early refinancing discussions can prepare the company for future repayment demands.

• Operational Review: Assess expenses and other operational costs to improve efficiency, ensuring the company can sustain operational "vitality."

• Governance and Transparency: Ensure all director-related transactions are fully disclosed and managed at arm’s length to maintain stakeholder confidence.

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