BERNARD HAINULT LTD

Executive Summary

Bernard Hainult Ltd has a strong asset base primarily in investment properties, supporting a healthy net asset position. However, the company shows signs of short-term liquidity stress due to negative working capital, which poses operational risks if not addressed. Focused management of cash flow, debtor collections, and short-term liabilities is essential to maintain financial wellness and ensure sustainable growth.

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Company Analysis

This analysis is opinion only and should not be interpreted as financial advice.

BERNARD HAINULT LTD - Analysis Report

Company Number: 12580986

Analysis Date: 2025-07-20 16:18 UTC

Financial Health Assessment of Bernard Hainult Ltd as at 30 April 2024


1. Financial Health Score: B

Bernard Hainult Ltd demonstrates a solid financial base anchored in substantial fixed assets and positive net assets, indicating a generally healthy financial position. However, the persistent negative net current assets (working capital deficit) signals liquidity strain, akin to a patient with a strong heart but slightly compromised circulation. The company is managing its debt well in the medium to long term, but the short-term cash flow "symptoms" require attention to avoid financial distress.


2. Key Vital Signs (Critical Financial Metrics)

Metric 2024 Value Interpretation
Fixed Assets £7,200,000 Very strong asset base, mainly in real estate (investment properties). A solid "heart" of the business.
Current Assets £215,827 Low relative to liabilities; includes £59,383 in cash. Indicates limited short-term liquidity.
Current Liabilities £573,158 Short-term debts due within one year. These exceed current assets, causing working capital deficit.
Net Current Assets (Working Capital) -£357,331 Negative working capital—a "symptom" of potential cash flow issues, risk of short-term strain.
Long-Term Liabilities £3,949,172 Significant secured bank and bridging loans, but manageable given asset backing.
Provisions for Liabilities (Deferred Tax) £789,568 Deferred tax liability related to timing differences on property valuations.
Net Assets £2,103,929 Positive and substantial net worth, reflecting equity and reserves.
Shareholders’ Funds £2,103,929 Indicates solid owner equity supporting the business.

3. Diagnosis: Financial Condition Analysis

  • Strengths ("Healthy Heart"):

    • The company’s fixed assets of £7.2 million, primarily investment properties, represent a strong capital base.
    • Positive net assets and shareholders’ funds indicate the company is solvent with equity backing.
    • Long-term liabilities are secured against tangible assets, reducing lender risk and indicating stable financing.
  • Symptoms of Distress (Liquidity Concerns):

    • The negative net current assets (working capital deficit of £357k) suggest the company may face short-term liquidity challenges.
    • Current assets, including cash and debtors, are insufficient to cover short-term liabilities, implying potential cash flow bottlenecks.
    • Though cash has increased since last year (£59k vs £43k), it remains low relative to short-term obligations.
  • Underlying Causes:

    • The business is capital intensive, with substantial borrowing secured on fixed assets but limited liquid resources.
    • Rental income (turnover) supports operations but the lag in debtor collections or timing of expenses could strain cash flow.
    • Deferred tax provisions reflect accounting for timing differences related to property valuation, not immediate cash outflow but a future liability to monitor.
  • Overall Financial Health:

    • The company is financially stable on a balance sheet basis but shows signs of "circulatory" stress due to working capital deficit.
    • Without improved current asset management or increased liquidity reserves, short-term operational risks exist.

4. Recommendations: Actions to Improve Financial Wellness

  1. Enhance Liquidity ("Improve Circulation"):

    • Accelerate debtor collections through tighter credit control and prompt invoicing.
    • Negotiate extended payment terms with suppliers or restructure current liabilities to ease short-term cash flow pressure.
    • Consider short-term financing options such as overdraft facilities or bridging loans with favourable terms.
  2. Working Capital Management:

    • Optimize the balance between current assets and liabilities by managing inventory and prepayments efficiently.
    • Regular cash flow forecasting to anticipate liquidity gaps and plan accordingly.
  3. Debt Monitoring and Restructuring:

    • Review long-term debt covenants with lenders to ensure flexibility.
    • Explore opportunities to refinance or consolidate debt to reduce interest costs and improve cash flow.
  4. Profitability and Income Stability:

    • Maintain or increase rental income streams through property management strategies.
    • Review operating expenses for possible reductions without compromising asset maintenance.
  5. Financial Reporting and Oversight:

    • Continue timely filing and transparent disclosure to maintain stakeholder confidence.
    • Consider an audit if the business grows to improve credibility.


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