Company Number: 12553923

Analysis Date: 2025-07-20 11:04 UTC

Financial Health Assessment of CR PROPERTY NE LTD as at 30 April 2024

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1. Financial Health Score: D

Explanation:
The company exhibits clear signs of financial distress with persistent net liabilities, significant current liabilities exceeding current assets, and a negative net asset position. These indicators suggest an unhealthy financial condition, though the company remains operational. The score reflects the need for urgent intervention to restore financial wellness.

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2. Key Vital Signs

Vital Sign	Value (2024)	Interpretation
Cash at Bank	£2,083	Critically low cash reserves; insufficient liquidity to cover short-term obligations comfortably.
Current Liabilities	£154,447	High short-term debts creating pressure on cash flow and working capital.
Net Current Assets	-£152,364	Negative working capital (current assets minus current liabilities), a symptom of liquidity risk.
Net Assets	-£21,264	Negative equity indicates liabilities exceed assets; a sign of financial strain.
Total Assets	£280,220 (Investment Property)	Fixed asset base exists but is largely offset by liabilities.
Long-Term Debt	£149,120	Substantial secured bank loans with repayments over 5 years; financial leverage is high.
Share Capital	£2.00	Minimal equity injection, reflecting limited shareholder buffer.

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3. Diagnosis: Financial Condition Analysis

• Liquidity (Cash Flow Health):
  The company’s cash reserves are very low (£2,083), while current liabilities are significantly higher (£154,447), resulting in a net current liability position of -£152,364. This is a classic symptom of liquidity distress, suggesting the company may struggle to meet short-term obligations without additional cash inflows or refinancing.

• Solvency (Balance Sheet Strength):
  The net asset position is negative (£-21,264), meaning the business owes more than it owns. This negative equity could limit access to new financing and raises concerns about going concern status if the situation persists.

• Asset Base:
  The company holds investment properties valued at £280,220, which represent the primary asset base. However, this is heavily leveraged with secured bank loans totaling £149,120 due over more than five years, indicating high financial gearing.

• Profitability & Reserves:
  Retained earnings are negative (£-21,266), indicating cumulative losses or distributions exceeding profits since inception. The absence of a profit and loss statement in filings limits full profitability analysis, but the negative reserves imply ongoing operational challenges or significant financing costs.

• Related Party Transactions:
  The company owes significant amounts to related parties (directors and associated entities), suggesting reliance on internal funding and possibly constrained external creditworthiness.

• Trend:
  The net liabilities have increased compared to prior years (-£13,913 in 2023 to -£21,264 in 2024), indicating worsening financial health over time. Similarly, net current liabilities have grown from -£145,013 to -£152,364, showing persistent liquidity pressure.

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4. Recommendations: Actions to Improve Financial Wellness

• Improve Liquidity Management:

  • Accelerate collection of any receivables or consider asset sales to boost cash reserves.
  • Negotiate extended payment terms with creditors to ease short-term cash flow pressures.

• Restructure Debt:

  • Engage with lenders to explore restructuring options, such as refinancing or extending loan maturities to reduce immediate financial burden.
  • Consider reducing reliance on related party loans by seeking external funding sources if feasible.

• Enhance Equity Base:

  • Consider additional equity injection from shareholders or new investors to improve net asset position and provide working capital.
  • Explore strategic partnerships or capital raising initiatives aligned with business growth plans.

• Operational Review:

  • Conduct a detailed operational and profitability review to identify cost-saving opportunities and improve margins.
  • Evaluate the portfolio of investment properties for potential sales or lease restructuring to generate more stable income.

• Regular Financial Monitoring:

  • Implement rigorous cash flow forecasting and working capital management to detect and address liquidity issues proactively.
  • Prepare and review comprehensive management accounts regularly to track progress and adjust strategies accordingly.

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Medical Analogy Summary

CR Property NE Ltd currently exhibits symptoms of financial distress akin to a patient with a weak heartbeat and low blood pressure—its cash flow is insufficient to meet immediate obligations, and its balance sheet shows a deficit akin to malnourishment in financial terms. Without prompt treatment through liquidity infusion, debt restructuring, and operational improvements, the prognosis could worsen, potentially leading to insolvency.

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