ALLZOR LTD

Executive Summary

ALLZOR LTD holds a strong asset base in investment property but faces liquidity challenges and negative net assets, indicating financial strain. Immediate focus on improving working capital, strengthening equity, and managing cash flow is essential to restore financial stability and ensure sustainable operations. With timely interventions, the company can regain a healthier financial position.

ALLZOR LTD - Analysis Report

Company Number: 13628759

Analysis Date: 2025-07-29 14:46 UTC

Financial Health Assessment for ALLZOR LTD

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1. Financial Health Score: C

Explanation:
ALLZOR LTD shows a mixed financial condition. It has substantial fixed assets in investment property, indicating a strong core asset base. However, it suffers from significant net current liabilities and negative net assets at the year-end, which signals liquidity pressures and balance sheet weakness. The company is not in immediate distress but shows symptoms that require active management to improve financial stability.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets (Investment Property + Tangibles)	931,155	Strong asset base mainly in real estate; a valuable core asset for the company.
Current Assets	34,223	Limited liquid assets (cash and debtors), showing weak short-term liquidity.
Current Liabilities	651,506	High short-term obligations; large working capital deficit (net current liabilities of -617,283), a red flag.
Net Current Assets (Working Capital)	-617,283	Negative working capital indicates potential difficulties meeting short-term debts.
Long-Term Creditors	388,772	Substantial long-term debt, which weighs heavily on financial stability.
Net Assets (Equity)	-74,900	Negative equity signals a net liability position, reflecting financial strain or accumulated losses/reserves.
Investment Property Reserve	-80,915	A notable decrease from prior year’s positive reserve, indicating valuation adjustments or impairments.
Profit & Loss Account (Retained Earnings)	5,915	Small positive retained earnings, showing some profitability or retained surplus.
Cash at Bank	3,077	Very low cash balance, indicating tight cash flow or limited liquidity reserve.

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3. Diagnosis: Financial Health Analysis

Symptoms of Financial Distress:

• Liquidity Crunch: The company’s current liabilities vastly exceed its current assets, showing a working capital deficit of over £600k. This is akin to a patient with a dangerously low blood pressure—there is insufficient short-term liquidity to cover immediate obligations.
• Negative Net Assets: The balance sheet shows a negative net asset position of nearly £75k, reflecting that total liabilities exceed total assets. This is similar to a patient whose vital signs indicate an imbalance between oxygen supply and demand—here, liabilities outweigh assets, a warning sign for financial health.
• Asset Concentration: The company’s primary asset is investment property valued at £930k. However, the property reserve has swung from a positive £16k to a negative £81k, suggesting asset revaluation losses or impairments. This vulnerability could limit borrowing capacity or investor confidence.
• Cash Flow Concerns: Cash at bank is very low (£3k), which is insufficient as a buffer for day-to-day operations. The company appears dependent on director funding, as noted in accounting policies, which may not be sustainable long-term.
• Going Concern Statement: Directors note reliance on capital owed to them and their commitment to not withdraw funds until stable. While this indicates a supportive management “caregiver,” reliance on director loans is a risk factor for financial resilience.

Positive Signs:

• The company has valuable fixed assets providing collateral value.
• Retained earnings are positive, showing some operational profitability or at least break-even.
• No overdue filings or penalties indicate compliance discipline.

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4. Recommendations: Prescription for Financial Wellness

1. Improve Liquidity -

   • Prioritize managing working capital by accelerating debtor collections and negotiating longer payment terms with creditors.
   • Consider raising short-term financing or restructuring current liabilities to avoid liquidity crises.

2. Strengthen Equity Base -

   • Explore options for equity injections, whether from current owners, new investors, or asset sales, to restore positive net assets and improve balance sheet health.

3. Asset Valuation and Utilization -

   • Conduct a professional independent valuation of investment properties to confirm fair values and explore opportunities to monetise or leverage these assets.
   • Review investment property management to maximise rental income and cash flow.

4. Cash Flow Management -

   • Establish a robust cash flow forecasting and monitoring process to anticipate liquidity shortfalls and act proactively.
   • Limit director loans as a long-term funding source to avoid concentration risk.

5. Cost Control and Profitability -

   • Review operational expenses and identify areas for cost savings.
   • Consider diversifying income streams beyond property rental to stabilize revenues.

6. Regular Financial Health Monitoring -

   • Set up early warning indicators for financial stress (e.g., current ratio, net asset value trends).
   • Engage with professional advisors periodically to assess going concern viability and compliance.

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