AEM LOGISTICKS LTD

Executive Summary

AEM LOGISTICKS LTD is facing significant liquidity and capital challenges, indicated by a sharp decline in working capital and net assets in the latest financial year. The company’s financial health is compromised, with urgent action needed to stabilize cash flow and restore equity. Immediate cost control, financial restructuring, and professional advice are recommended to improve the business’s outlook.

AEM LOGISTICKS LTD - Analysis Report

Company Number: 13678113

Analysis Date: 2025-07-20 14:18 UTC

Financial Health Assessment Report for AEM LOGISTICKS LTD
Assessment Date: 2025-01-15 (following latest accounts date 2024-10-31)

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1. Financial Health Score: D

Explanation:
AEM LOGISTICKS LTD exhibits clear signs of financial distress in its most recent year, reflected by a sharp deterioration in liquidity and net asset value. The net current assets have swung from a healthy positive position in prior years to a negative £1,313 in 2024. This indicates the company's working capital — the "cash flow pulse" keeping day-to-day operations alive — is currently weak and could threaten ongoing operational viability. The significant drop in net assets from £9,790 (2023) to £444 (2024) further signals financial strain. The score "D" denotes a business showing symptoms of distress requiring prompt managerial and financial intervention.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	1,757	2,481	Slight reduction, indicating possible asset disposals or depreciation.
Current Assets	1,147	848	Modest increase, possibly from cash or receivables.
Current Liabilities	2,460	6,461 (negative figure likely a data anomaly, assuming positive)	Significant drop in current liabilities if data is accurate, but 2023 figure appears inconsistent; careful verification needed.
Net Current Assets (Working Capital)	-1,313	7,309	Negative working capital in 2024 is a critical symptom of liquidity problems.
Total Assets less Current Liabilities	444	9,790	Drastic decline, indicating worsening overall asset coverage of liabilities.
Net Assets (Equity)	444	9,790	Equity erosion suggests losses or withdrawals, impacting shareholder value.
Number of Employees	2	2	Stable headcount, but financial stress may impact staff retention or operations.

Interpretation:

• The negative net current assets means the company may struggle to meet short-term obligations without additional financing or asset sales.
• The severe drop in net assets signals accumulated losses or significant capital withdrawals.
• The increase in current assets is positive but insufficient to offset liabilities.
• The apparent inconsistency in 2023 current liabilities (negative figure) requires verification; if correct, the 2023 financials may have been restated or presented differently.

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3. Diagnosis

• Liquidity Crisis: The company’s "cash flow pulse" has weakened significantly. Negative working capital suggests the business could face difficulty paying suppliers and short-term debts on time. This is a classic symptom of distress in small companies reliant on tight cash flow management.
• Capital Erosion: The drop in net assets from nearly £10,000 to under £500 indicates the company has been consuming its capital base, possibly through operational losses or owner withdrawals. This reduces the financial buffer to absorb shocks and invest in growth.
• Operational Stability: The stable employee numbers suggest operations have been maintained, but the financial strain reflects pressure that could impact future sustainability without corrective action.
• Data Integrity Issue: The anomalous negative figure for 2023 current liabilities should be clarified to ensure accurate diagnosis.

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4. Recommendations

• Immediate Cash Flow Management: Undertake a stringent review of receivables, payables, and inventory to optimize working capital. Negotiate payment terms with creditors where possible to alleviate short-term cash pressure.
• Financial Restructuring: Explore options for capital injection, whether through shareholder loans, additional equity, or external financing, to restore positive net assets and liquidity.
• Cost Control: Review operational expenses and overheads to identify savings without compromising critical business functions.
• Financial Reporting Review: Investigate and correct any reporting anomalies (e.g., 2023 current liabilities figure) to ensure clarity for management and stakeholders.
• Strategic Planning: Develop a forward-looking financial plan incorporating realistic revenue forecasts and cost management to regain financial health.
• Professional Advice: Engage with an insolvency practitioner or financial advisor for expert guidance on restructuring options if liquidity issues persist.

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Medical Analogy Summary

AEM LOGISTICKS LTD currently exhibits "symptoms of financial distress" akin to a patient with a weakened heart (cash flow) and depleted reserves (net assets). Without urgent intervention — akin to administering critical treatment — the company risks "organ failure" in the form of insolvency or business closure.

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