ANCHOR EVENT MANAGEMENT LTD

Executive Summary

ANCHOR EVENT MANAGEMENT LTD is currently experiencing serious financial distress characterized by negative working capital and escalating liabilities surpassing assets. Immediate actions focusing on cash flow management, debt restructuring, and cost control are essential to stabilize the business and improve its financial outlook. Without intervention, the risk of insolvency remains high.

ANCHOR EVENT MANAGEMENT LTD - Analysis Report

Company Number: 14033751

Analysis Date: 2025-07-29 14:36 UTC

Financial Health Assessment Report: ANCHOR EVENT MANAGEMENT LTD
Date of Assessment: June 2025

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1. Financial Health Score: D (Poor)

Explanation:
The company exhibits significant financial distress, characterized by persistent and growing negative net assets, substantial current liabilities exceeding current assets, and ongoing reliance on director loans. These symptoms suggest the company is in a fragile state, facing liquidity challenges and solvency risks.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	27,346	9,837	Slight improvement but still low
Cash	6,826	4,837	Limited cash buffer for daily operations
Debtors	14,920	425	Significant increase, potential cash conversion delay
Current Liabilities	207,346	79,377	More than doubled, serious short-term obligations
Net Current Assets	-180,000	-69,540	Severe working capital deficit ("cash flow anemia")
Total Assets Less Current Liabilities	-164,417	-61,321	Negative, indicating liabilities exceed assets
Net Assets (Shareholders' Funds)	-201,417	-88,322	Deepening loss position, eroding equity ("heart failure")
Loans from Directors	77,628	68,628	Increasing reliance on director financing
Average Number of Employees	12	5	Growth in staff, increasing overhead

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3. Diagnosis

The company is showing clear symptoms of financial distress:

• Liquidity Crisis: The current liabilities vastly exceed current assets, resulting in a negative working capital of £180,000 at the latest year-end. This means the company lacks sufficient short-term resources to meet immediate obligations, akin to a patient with dangerously low blood pressure risking collapse.

• Solvency Concerns: The net liabilities of over £201,000 indicate the company owes more than it owns. This is comparable to an individual whose debts outweigh their assets, raising the risk of insolvency.

• Increasing Financial Strain: The doubling of current liabilities and growing director loans point to an increased dependency on external support to keep the business functioning, similar to a patient requiring ongoing critical care.

• Operational Expansion: Staff numbers have more than doubled, implying higher fixed costs that may exacerbate cash flow pressures if revenue growth does not keep pace.

• Asset Base: Tangible fixed assets have increased, but these are overshadowed by liabilities and do not provide immediate liquidity relief.

Given the above, the company’s financial health is in a critical condition, requiring urgent intervention.

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4. Recommendations

To improve the financial wellness of ANCHOR EVENT MANAGEMENT LTD, the following actions are advised:

1. Emergency Cash Flow Management:
   Implement stringent cash control measures to preserve liquidity. Review payment terms with creditors and debtors to accelerate cash inflows and delay outflows where feasible.

2. Debt Restructuring:
   Engage with lenders and directors to restructure existing debts, potentially negotiating extended repayment terms or converting some liabilities into equity to reduce immediate pressure.

3. Cost Rationalization:
   Assess staffing and operational costs critically. Consider whether the current headcount aligns with revenue forecasts and identify non-essential expenses for reduction.

4. Revenue Boost Strategies:
   Develop and implement targeted marketing and sales initiatives to increase turnover, focusing on improving debtor collection efficiency and reducing bad debts.

5. Financial Monitoring:
   Establish robust financial monitoring and forecasting processes to detect early warning signs, enabling proactive management of financial health.

6. Professional Advice:
   Consult insolvency and restructuring specialists to explore all viable options to prevent deterioration into formal insolvency procedures.

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