BIOGENETICS & TECH LIMITED

Executive Summary

Biogenetics & Tech Limited is facing financial distress marked by negative equity and working capital deficits, though recent profit signals some operational improvement. The company currently relies heavily on shareholder support to meet obligations, posing risks to liquidity and long-term viability. Focused efforts on improving cash flow, reducing reliance on owner loans, and strengthening profitability are critical to restoring financial health and ensuring sustainability.

BIOGENETICS & TECH LIMITED - Analysis Report

Company Number: 14174403

Analysis Date: 2025-07-20 15:08 UTC

Financial Health Assessment of Biogenetics & Tech Limited as at 30 June 2024

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1. Financial Health Score: D

Explanation:
The company exhibits several concerning symptoms indicating financial distress. A negative net asset position (shareholders’ funds) and net current liabilities suggest that the company’s financial "vital signs" are weak. Although there is some profit improvement, reliance on shareholder support and ongoing negative equity weigh heavily on the overall assessment.

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2. Key Vital Signs

Metric	Value (Euro)	Interpretation
Net Current Assets	-€45,279	Negative working capital—current liabilities exceed current assets—implies liquidity strain.
Shareholders’ Funds (Equity)	-€45,279	Negative equity ("balance sheet deficit") indicates liabilities exceed assets—sign of financial distress.
Profit for the Year	+€8,962	Positive net income is a sign of operational improvement but not yet sufficient to restore equity.
Debtors (Prepayments)	€501,650	High prepayments and accrued income; these are not immediately cash.
Cash at Bank	€18,409	Limited cash reserves—restricted ability to cover immediate expenses.
Shareholder’s Current Account	€614,710	Significant shareholder loans or advances—company relies heavily on owner support to meet obligations.

Interpretation:

• The "pulse" of the company—its liquidity—is weak due to net current liabilities, indicating potential short-term cash flow difficulties.
• The "balance sheet health" shows negative equity, a serious symptom akin to a patient with vital organ function compromised.
• The company has made a small profit in the latest year, a positive sign ("vital sign" improvement), but it has not yet translated into improved net assets.
• Heavy reliance on shareholder loans is a temporary "life support" mechanism, not sustainable long-term without operational profitability and cash flow improvement.

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3. Diagnosis

Biogenetics & Tech Limited is currently in a precarious financial state:

• Symptoms of distress: Negative net assets and working capital show the company is "under financial strain." This is often a sign of chronic undercapitalization or losses in earlier periods. The company's balance sheet looks like a patient with a weakened immune system, vulnerable to shocks.
• Positive symptom: The company reported a profit of €8,962 in the current year, indicating some recovery or improved operational performance. However, this profit is modest relative to the scale of negative equity.
• Reliance on shareholder financing: The large shareholder current account indicates that the company is dependent on ongoing financial injections from its owner. This is like a patient on IV fluids—necessary but not a cure.
• Going concern status: The director states the company is a going concern, supported by shareholder assurances. This is positive but depends heavily on continued owner support and eventual operational turnaround.
• Industry context: Operating in biotechnology and social sciences research (SIC codes 72110 and 72200) often implies long development cycles and delayed profitability, which may explain the current financial challenges.

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4. Recommendations

To restore financial wellness and improve the long-term prognosis, the company should consider the following actions:

• Improve liquidity management:

  • Convert prepayments and accrued income into cash more efficiently.
  • Tighten control over cash outflows to avoid liquidity "crises."

• Reduce reliance on shareholder loans:

  • Develop a plan to replace shareholder financing with sustainable operating cash flow or external financing if feasible.
  • Consider restructuring existing shareholder loans with clear repayment or conversion terms.

• Enhance operational profitability:

  • Continue efforts to increase revenue and control operating costs.
  • Explore grants, subsidies, or partnerships specific to biotech and research sectors to boost income.

• Strengthen equity base:

  • Explore fresh equity injection or capital raising to eliminate negative net assets.
  • Communicate transparently with stakeholders about plans to restore balance sheet health.

• Regular financial monitoring:

  • Establish monthly cash flow forecasting to detect early signs of distress.
  • Implement key performance indicators (KPIs) to track progress against financial goals.

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Executive Summary