Company Number: 13165846

Analysis Date: 2025-07-20 16:36 UTC

Financial Health Assessment for BROOK17 HOLDINGS LIMITED

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1. Financial Health Score: C

Explanation:
The company exhibits moderate financial health with stable net assets and increasing fixed assets, particularly investment property. However, the presence of significant long-term liabilities and ongoing negative net current assets ("working capital deficit") indicate liquidity strain, which merits caution. The financial position is neither critically weak nor particularly robust, hence a mid-range grade.

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2. Key Vital Signs:

Metric	2024 Value	Interpretation
Fixed Assets	£583,288	Healthy and growing asset base, mainly investment properties.
Cash at Bank	£8,125	Low cash reserves, potentially limiting day-to-day flexibility.
Current Liabilities	£428,107	High short-term obligations, may stress liquidity.
Net Current Assets	-£21,304	Negative working capital, a symptom of liquidity tension.
Long-term Creditors	£428,107	Significant long-term debt to connected companies, impacting solvency.
Net Assets	£109,162	Positive equity base indicates residual value after liabilities.
Revaluation Reserve	£98,861	Reflects unrealised gains in investment properties, positive sign.
Profit and Loss Reserves	£9,301	Retained earnings are positive but modest.
Share Capital	£1,000	Nominal share capital, typical for private companies.

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3. Diagnosis:

BROOK17 HOLDINGS LIMITED shows signs of both strength and strain. The company’s core asset—investment property—has appreciated significantly, reflected in the revaluation reserve, which acts like a “healthy heartbeat” in the balance sheet. This asset growth indicates potential for capital appreciation and rental income generation.

However, the company’s cash position is weak, and current liabilities exceed current assets, resulting in a negative working capital. This liquidity gap is a “symptom of distress” that could hinder the company’s ability to meet short-term obligations without raising additional funds or converting assets quickly.

The presence of substantial creditors due after more than one year (long-term debt) owed to connected companies also signals financial leverage. While this can be a strategic funding source, it increases the company’s fixed obligations, which could become problematic if cash flow falters.

Positive net assets and equity indicate the company is solvent, but the combination of liquidity pressure and reliance on related party debt suggests the company should monitor cash flows closely and ensure sustainable operations.

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4. Recommendations:

• Improve Liquidity Management:
  Address the negative net current assets by increasing cash reserves. This might involve better collection of receivables, negotiating extended payment terms with suppliers, or reducing short-term liabilities.

• Review Related Party Debt:
  The significant long-term debt owed to connected companies should be reviewed. Consider restructuring this debt to more favourable terms or converting part of it into equity to strengthen the balance sheet and reduce financial risk.

• Enhance Cash Flow Forecasting:
  Implement rigorous cash flow monitoring to anticipate liquidity crunches and plan for financing needs proactively.

• Leverage Investment Property:
  Explore opportunities to generate rental income or realise capital gains from the investment properties to improve operating cash inflows.

• Build Profit Reserves:
  Aim to increase retained earnings through profitable operations to create a buffer for future financial challenges.

• Maintain Compliance:
  Continue timely filing of accounts and confirmation statements to avoid penalties and maintain good standing.

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