AIRE VIEW PROPERTIES LTD

Executive Summary

Aire View Properties Ltd maintains a solid asset base but struggles with negative working capital and high liabilities, presenting liquidity challenges. Recent improvement in net assets is encouraging, but focused actions on cash flow management and debt restructuring are essential to ensure sustainable financial health.

AIRE VIEW PROPERTIES LTD - Analysis Report

Company Number: 12655208

Analysis Date: 2025-07-20 16:16 UTC

Financial Health Assessment for Aire View Properties Ltd

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1. Financial Health Score: C

Explanation:
Aire View Properties Ltd exhibits moderate financial health. While the company maintains substantial fixed assets, it faces persistent working capital deficits and high long-term liabilities, which dampen its liquidity and overall financial robustness. The slight positive net asset position in the latest year shows improvement, but ongoing symptoms of liquidity strain suggest caution.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	492,462	Strong asset base primarily in property or investments, indicating stable long-term resources.
Current Assets	20,409	Limited short-term assets; primarily cash or receivables, quite low relative to liabilities.
Current Liabilities	344,699	High short-term obligations, a warning sign for liquidity stress.
Net Current Assets (Working Capital)	-143,220	Negative working capital indicates potential difficulty covering immediate debts ("cash flow stress").
Long-term Liabilities	344,699	Significant debt or obligations due after one year, reflecting leverage.
Net Assets (Equity)	4,543	Just positive, showing a marginal buffer after liabilities; improved from previous years.
Share Capital	100	Minimal share capital, typical for micro-entities.
Profit & Loss Reserve	Not explicitly stated but implied small positive net assets.

Note: The company has no employees, which is common for property holding entities.

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3. Diagnosis: What the Financial Data Reveals

• Asset Strength but Liquidity Strain:
  The company holds significant fixed assets (likely property), which is its core strength. However, current assets are insufficient to cover current liabilities, indicating "symptoms of distress" in liquidity. This means the company may struggle to meet short-term obligations without relying on refinancing or asset sales.

• Working Capital Deficiency:
  Negative net current assets over several years highlight ongoing working capital issues. This suggests the company operates with tight cash flow, potentially increasing risk if any unexpected costs arise or rental income fluctuates.

• Leverage and Debt Load:
  Total liabilities, especially long-term debts, are substantial. This leverage can amplify returns in good times but poses risk if property values decline or financing costs rise.

• Improving Equity Position:
  The company moved from a small net liability position (-£39) to a small positive net asset position (+£4,543), which signals a mild recovery or improved profitability/asset valuation.

• No Operating Employees:
  As a property letting company, the lack of employees is typical and reduces overhead, but also suggests reliance on external management or automation.

• Micro Entity Status:
  As a micro entity, the company benefits from simplified reporting but limited disclosure means some risks or operational details are not visible.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Improve Liquidity Management:
  Prioritize increasing current assets or reducing short-term liabilities to alleviate negative working capital. This could include accelerating rent collection, negotiating extended payment terms with creditors, or building a cash reserve.

• Debt Restructuring:
  Engage with lenders to explore refinancing options to reduce immediate debt pressure or secure more favourable terms, spreading repayments over a longer period.

• Asset Utilization Review:
  Assess whether fixed assets are optimally leveraged. Consider selling non-core properties or assets that do not generate stable income to improve cash flow.

• Financial Forecasting and Contingency Planning:
  Implement detailed short- and medium-term cash flow forecasting to anticipate potential liquidity shortfalls. Develop contingency plans, including access to credit lines.

• Increase Equity Buffer:
  Consider additional capital injection from shareholders if feasible, to strengthen the equity base and provide a cushion against future downturns.

• Maintain Compliance and Timely Reporting:
  Continue timely filing of accounts and confirmation statements to avoid penalties and maintain good standing with Companies House, which supports creditworthiness.

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Medical Analogy Summary

Aire View Properties Ltd’s financial "vital signs" reveal a sturdy "skeletal structure" (fixed assets) but weak "circulatory system" (working capital and liquidity). The company shows "symptoms of distress" in short-term cash flow management, akin to a patient with a strong heart but poor blood flow. With careful "treatment" in liquidity management and debt restructuring, the prognosis can improve, avoiding the risk of financial "collapse" under pressure.

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