CHRIS HOLLINS LTD

Executive Summary

CHRIS HOLLINS LTD shows encouraging signs of financial recovery with positive net assets in 2024 after years of negative equity, reflecting partial healing from prior distress. However, low liquidity and a high debt burden remain significant vulnerabilities, indicating the company requires careful cash flow management and debt restructuring to avoid relapse. Strengthening working capital and managing long-term liabilities will be critical to sustaining financial health going forward.

CHRIS HOLLINS LTD - Analysis Report

Company Number: SC671521

Analysis Date: 2025-07-20 16:09 UTC

Financial Health Assessment for CHRIS HOLLINS LTD (as of 31 August 2024)

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1. Financial Health Score: C

Explanation:
The company demonstrates a recovering but still fragile financial condition. The positive net assets in 2024 show improvement from prior years of net liabilities, indicating some healing of financial wounds. However, the company's high level of long-term creditors relative to assets and minimal working capital suggest a delicate state akin to a patient emerging from illness but still requiring careful monitoring and treatment.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Net Assets (Shareholders' Funds)	£13,416 (positive)	Positive net worth for the first time since 2020 – a sign of financial recovery.
Fixed Assets	£182,377	Significant investment in property-related assets, consistent with SIC 68100 (real estate). Indicates asset backing but possible illiquidity.
Current Assets	£6,783	Very low short-term assets; limited liquid resources.
Current Liabilities	£5,127	Short-term debts are low relative to assets, indicating manageable short-term obligations.
Net Current Assets (Working Capital)	£2,231	Positive but very modest; suggests limited buffer to cover day-to-day operations.
Long-term Creditors	£170,191	High level of long-term liabilities compared to assets; represents a heavy debt burden.
Profit & Loss / Retained Earnings	Not specifically disclosed	Given past negative net assets, prior years likely showed accumulated losses which appear to be reducing.

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3. Diagnosis: What the Financial Data Reveals About Business Health

• Symptom of Past Financial Distress:
  The company reported net liabilities (negative net assets) consistently from incorporation through 2023, indicating a period of financial stress akin to a patient with chronic illness. This suggests accumulated losses or undercapitalization in early years.

• Signs of Recovery:
  In the latest year (2024), net assets turned positive (£13,416), indicating the company has begun to mend its financial health. This improvement may reflect asset revaluation gains, debt restructuring, or operational progress.

• Liquidity Concerns:
  Current assets are very low (£6,783) and only slightly exceed current liabilities (£5,127), resulting in a thin working capital margin. This is comparable to a patient with limited energy reserves—enough to function but vulnerable to shocks.

• Leverage and Debt Burden:
  The company carries significant long-term creditors (£170,191), nearly equal to the total fixed assets (£182,377). This high leverage ratio signals ongoing financial risk. The company is reliant on meeting obligations from future cash flows or refinancing—akin to a patient dependent on medication to stay stable.

• Asset Composition:
  The bulk of assets are fixed (property-related), which are less liquid and harder to convert quickly to cash. This limits the company's flexibility in managing sudden cash demands.

• Micro-Entity Status:
  As a micro company, CHRIS HOLLINS LTD benefits from simplified reporting but may face constraints in accessing larger credit facilities or investor capital.

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4. Recommendations: Specific Actions to Improve Financial Wellness

a. Strengthen Liquidity ("Boost the bloodstream")

• Aim to increase current assets, particularly cash or receivables, to build a stronger working capital buffer.
• Consider negotiating better payment terms with suppliers or customers to improve cash flow timing.

b. Manage Long-Term Debt ("Alleviate the chronic burden")

• Explore options for restructuring or refinancing long-term creditors to extend maturities or reduce interest costs.
• Where feasible, reduce debt levels via asset sales or equity injections to improve solvency.

c. Enhance Profitability ("Improve metabolic health")

• Review operational efficiency to increase margins and generate sustainable profits, which will replenish reserves and strengthen equity.
• Focus on core profitable real estate activities and avoid non-core expenditures.

d. Maintain Compliance and Timely Reporting ("Regular health check-ups")

• Continue to file annual accounts and confirmation statements promptly to avoid regulatory penalties and maintain trust with creditors and stakeholders.

e. Consider Professional Financial Advice ("Consult a specialist")

• Engage with financial advisors or accountants for debt management and strategic planning to ensure long-term viability.

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