CLAIMTECH LTD

Executive Summary

CLAIMTECH LTD is facing significant financial challenges characterized by negative net assets and severe liquidity shortages. Its survival depends heavily on continued support from its parent company, as operational losses deepen. Immediate strategic and financial restructuring is essential to restore financial health and ensure long-term viability.

CLAIMTECH LTD - Analysis Report

Company Number: 13134407

Analysis Date: 2025-07-20 14:18 UTC

Financial Health Assessment for CLAIMTECH LTD (as at 30 November 2023)

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1. Financial Health Score: D

Explanation:
CLAIMTECH LTD exhibits significant financial distress symptoms, including net liabilities and negative working capital, indicating compromised financial stability. The company's reliance on related-party loans to meet operational needs points to a fragile financial condition. Hence, a "D" grade reflects a warning signal that urgent corrective actions are necessary to restore health.

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2. Key Vital Signs: Critical Metrics and Interpretation

Vital Sign	Value (£)	Interpretation
Fixed Assets	3,202	Minimal long-term asset base, typical for a software development firm.
Current Assets	6,697	Low short-term resources available to cover liabilities.
Cash at Bank/In Hand	5,319	Limited cash buffer; crucial for day-to-day liquidity.
Debtors	1,378	Small amount of receivables; timely collection is vital.
Current Liabilities	192,007	Very high short-term obligations, predominantly from related party loans.
Net Current Assets	-185,310	Severe negative working capital, indicating liquidity crunch.
Net Assets / Shareholders Funds	-182,108	Net liabilities, showing that total liabilities exceed assets notably.
Profit & Loss Reserve (Accumulated Losses)	-182,109	Accumulated losses reflect ongoing unprofitability and erosion of equity.
Turnover	Not disclosed	Revenue data unavailable, limiting full performance analysis.

Interpretation:

• Negative Working Capital ("symptom of distress"): The company’s current liabilities greatly exceed current assets, like a patient with insufficient blood supply to vital organs, signaling liquidity problems.
• Net Liabilities ("critical condition"): Total liabilities surpass total assets by a wide margin, indicating insolvency risk if the condition persists.
• Related Party Debt ("life support"): The company depends heavily on an interest-free, unsecured loan from its parent TGG Ltd, which acts as a financial lifeline. Without this support, the company might not survive.
• Loss Accumulation ("chronic illness"): Losses have deepened sharply from prior years, indicating persistent negative profitability and inability to generate internal cash flow.

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

CLAIMTECH LTD is currently in a precarious financial state. The company shows symptoms of severe liquidity strain and capital erosion, characterized by:

• A negative net asset base of £182,108, indicating that the company owes more than it owns.
• An alarming negative working capital of approximately £185,310, suggesting current liabilities are far from covered by liquid assets, threatening operational continuity.
• The company’s financial lifeline is a substantial loan from its parent company (TGG Ltd) totaling £184,164, interest-free and unsecured, highlighting dependency on external support.
• The accumulated losses have increased significantly (from -£48,867 in 2022 to -£182,109 in 2023), reflecting ongoing operational losses and lack of profitability.
• Absence of turnover data in the filings restricts full diagnosis, but the financials strongly imply the business is not generating sufficient revenue or cash inflows to cover expenses and debt.
• The going concern statement by directors confirms reliance on continued parent company support to remain solvent.

Overall, the company’s condition resembles a patient in critical care, sustained by artificial support but showing no signs of recovery without intervention.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Urgently Address Liquidity Crisis

   • Seek to restructure or convert related-party loans into equity to reduce current liabilities and improve net assets.
   • Explore additional external funding or capital injections to build a healthy cash buffer.

2. Improve Revenue Generation and Profitability

   • Conduct a thorough review of the business model and sales pipeline to identify growth opportunities.
   • Tighten cost control measures to reduce operating losses.

3. Enhance Financial Reporting and Transparency

   • Provide detailed turnover and profit & loss statements in future filings to enable comprehensive stakeholder assessment.
   • Consider external audit to build confidence with financiers and investors.

4. Strengthen Working Capital Management

   • Accelerate debtor collections and optimize inventory (if applicable) to improve current assets.
   • Negotiate extended payment terms with creditors to ease short-term obligations.

5. Develop a Robust Going Concern Plan

   • Prepare and communicate a credible plan demonstrating how the company will achieve sustainable profitability and reduce reliance on parent company loans.

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Medical Analogy Summary:

CLAIMTECH LTD currently exhibits "symptoms of financial distress" such as negative working capital and net liabilities akin to a patient suffering from critical organ failure. The company is currently on "life support" via related-party loans. Without timely and effective intervention—like an intensive care treatment plan addressing liquidity and profitability—the prognosis remains guarded with risk of insolvency.

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