B&R (BOLGER&REDSHAW) PRECISION ENGINEERING LIMITED

Executive Summary

B&R Precision Engineering Limited shows signs of acute financial strain with negative net assets and severe working capital deficiency. Immediate liquidity management and capital restructuring are essential to stabilize and improve the company's financial health.

B&R (BOLGER&REDSHAW) PRECISION ENGINEERING LIMITED - Analysis Report

Company Number: 14687750

Analysis Date: 2025-07-29 15:23 UTC

Financial Health Assessment for B&R (BOLGER&REDSHAW) PRECISION ENGINEERING LIMITED

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1. Financial Health Score: D

Explanation:
The company shows significant financial distress signals, notably a large negative net asset position and a severe working capital deficit. While it is a new business (incorporated in 2023), the balance sheet reveals "symptoms of distress" such as liabilities exceeding assets and negative shareholder funds. These indicators suggest the company is currently in a fragile financial state, requiring urgent corrective measures to restore health.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets (Long-term assets)	557,086	Significant investment in plant and machinery ("capital health")
Current Assets (Cash + Debtors)	118,264	Limited liquid resources available to meet short-term demands
Current Liabilities	543,124	High short-term obligations ("liquidity pressure")
Net Current Assets	-424,860	Negative working capital indicates cash flow problems
Total Assets less Current Liabilities	132,226	Positive but small buffer before considering long-term debts
Creditors due after 1 year	294,335	Long-term debt adds pressure on future cash flows
Net Assets (Shareholders’ Funds)	-162,109	Negative equity signals insolvency risk ("balance sheet illness")
Share Capital	200	Minimal capital base

Interpretation:

• Liquidity: The company’s current liabilities far exceed current assets, indicating an inability to cover short-term debts from readily available resources. This is akin to a patient with low blood pressure — the business lacks sufficient "cash flow vitality" to sustain normal operations comfortably.
• Solvency: Negative net assets (equity) imply that the company owes more than it owns, a critical symptom of financial distress. This condition is comparable to a patient with organ failure, suggesting the company’s capital structure is severely impaired.
• Asset Base: The company has invested heavily in fixed assets (plant and machinery), which are not easily liquidated to meet immediate obligations. This suggests illiquidity in asset composition, much like having a high cholesterol number despite low blood pressure — an imbalance creating risk.

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3. Diagnosis

B&R Precision Engineering Limited is in an early-stage but challenged financial condition. The large investments in fixed assets indicate a capital-intensive start-up phase, typical for precision engineering businesses. However, the acute mismatch between short-term assets and liabilities — a "working capital deficiency" — signals acute liquidity distress. The negative shareholders’ funds reflect accumulated losses or initial financing shortfalls.

In medical terms, the company is exhibiting symptoms of "acute financial strain" that, if untreated, could lead to "financial insolvency." The company’s financial "vital signs" suggest it is in a critical but potentially reversible state, provided management intervenes quickly.

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4. Recommendations

1. Improve Liquidity (Cash Flow Management):

   • Seek short-term financing or overdraft facilities to cover immediate liabilities.
   • Accelerate debtor collections and negotiate extended payment terms with creditors to ease cash flow pressure.
   • Monitor cash flow daily to avoid liquidity crises.

2. Restructure Debt:

   • Engage with lenders and creditors to restructure hire purchase and other debts, potentially converting short-term liabilities to longer-term obligations to reduce immediate burden.

3. Capital Injection:

   • Consider equity injections from existing shareholders or new investors to restore positive net asset value and strengthen the balance sheet.

4. Operational Efficiency:

   • Review operating costs carefully to reduce unnecessary expenses.
   • Optimize asset utilization to generate sufficient revenue to cover depreciation and debt servicing.

5. Regular Financial Monitoring:

   • Implement monthly financial reporting and forecasting to detect early signs of distress and enable proactive management.

6. Professional Advice:

   • Consult insolvency practitioners or financial advisors experienced in turnaround situations if cash flow does not improve promptly.

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Executive Summary:

B&R Precision Engineering Limited is currently in a fragile financial state characterized by significant liquidity stress and negative equity. The company faces urgent "financial health" challenges with liabilities exceeding assets and insufficient working capital. Immediate actions to improve cash flow, restructure debt, and strengthen capital are critical to prevent worsening distress and promote recovery.