ACTIV8 PROPERTY MANAGEMENT LTD

Executive Summary

ACTIV8 PROPERTY MANAGEMENT LTD demonstrates significant financial distress characterized by heavily negative net assets and poor liquidity metrics, placing it at high risk from a solvency and operational perspective. While compliance with statutory filings and investment in fixed assets are positive signs, the magnitude of current liabilities against minimal current assets is a critical red flag warranting thorough investigation of creditor terms and cash flow viability. Immediate due diligence should focus on liability structure and operational cash management to ascertain potential recovery or restructuring pathways.

ACTIV8 PROPERTY MANAGEMENT LTD - Analysis Report

Company Number: 13043643

Analysis Date: 2025-07-29 14:16 UTC

1. Risk Rating: HIGH

Justification: The company exhibits a significant negative net asset position and a large imbalance between current liabilities and current assets, indicating solvency and liquidity concerns. The negative shareholders’ funds have more than doubled from £-374k in 2022 to £-813k in 2023, reflecting deteriorating financial health. The current liabilities vastly exceed current assets (2023: £1.68m vs. £2.2k), suggesting severe liquidity constraints.

2. Key Concerns:

• Solvency Risk: Net assets are deeply negative at £-812,597, driven by long-term creditors far exceeding total assets, posing a risk to the company’s ability to meet obligations.
• Liquidity Concerns: Current liabilities (£1.676m) overwhelmingly surpass current assets (£2.2k), resulting in negative net working capital, which is a strong indicator of cash flow difficulties.
• Operational Stability: Despite holding fixed assets valued at £895,000, the company’s persistent and growing losses reflected in shareholders’ deficit raise serious questions about the sustainability of the business model and operational cash generation.

3. Positive Indicators:

• The company is current on filings with no overdue accounts or confirmation statements, demonstrating compliance with statutory requirements.
• The business has maintained its principal activity consistently as property management and letting, with a small stable workforce of two employees.
• The increase in fixed assets from £615,000 to £895,000 may indicate investment in property, which could be leveraged for future stability if effectively managed.

4. Due Diligence Notes:

• Investigate the nature and terms of the significant long-term liabilities (£1.676m) to understand creditor composition, repayment schedules, and potential restructuring.
• Assess cash flow statements and operational cash generation capacity beyond balance sheet snapshots to evaluate short-term liquidity management.
• Review directors’ commentary or strategic reports (if available) for plans addressing the negative equity and whether additional capital injections or asset sales are anticipated.
• Confirm the valuation methodology and marketability of fixed assets, as overvaluation could mask underlying financial risks.
• Examine related party transactions or loans that may impact financial stability or governance.