DCI 3 LIMITED

Executive Summary

DCI 3 LIMITED is financially stable with strong short-term liquidity and positive equity, supported by a profitable loan portfolio. However, the company carries significant long-term debt requiring careful management to mitigate leverage risks. Maintaining diligent credit control and considering equity strengthening will help ensure continued financial health and resilience.

DCI 3 LIMITED - Analysis Report

Company Number: 13799825

Analysis Date: 2025-07-29 17:27 UTC

Financial Health Assessment of DCI 3 LIMITED

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1. Financial Health Score: B

Explanation:
DCI 3 LIMITED demonstrates solid financial stability with a positive net asset position and strong working capital. However, the company carries significant long-term liabilities, which require careful management. The financial "vital signs" indicate relatively healthy liquidity and solvency, but the reliance on substantial bank loans introduces risks that need ongoing monitoring. Overall, the company is financially sound but not without areas for vigilance.

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2. Key Vital Signs

Metric	Value (2023)	Interpretation
Current Assets	£3,445,665	High short-term assets, mainly debtors (loans receivable)
Current Liabilities	£124,961	Low immediate liabilities, indicating good short-term liquidity
Net Current Assets (Working Capital)	£3,320,704	Very healthy working capital, positive cash flow potential
Long-term Liabilities	£3,012,868	Significant bank loans secured against assets; a key financial obligation
Net Assets (Equity)	£307,836	Positive shareholder equity indicating solvency
Share Capital	£100	Minimal paid-up capital; most equity is retained earnings
Profit & Loss Reserves	£307,736	Accumulated retained earnings, showing profitability over time
Directors & Control	Controlled 100% by District and County Investments Limited	Clear ownership and control structure
Industry	Financial Intermediation (Bridging and Development Loans)	Business model involves lending, reflected in debtor assets

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3. Diagnosis: Financial Health Overview

DCI 3 LIMITED's financial condition resembles a patient with a strong pulse and stable vitals but with a chronic condition requiring management — specifically, its reliance on substantial bank loans. The company holds a significant portfolio of loans receivable (£3.45m), which forms the bulk of current assets, indicating its core business activity is financial lending.

• Liquidity ("Healthy Cash Flow"): The current ratio is very strong (current assets far exceed current liabilities), meaning the company can comfortably meet short-term obligations without distress.

• Solvency: Positive net assets and shareholder funds (£308k) indicate that the company is solvent. However, net assets are modest compared to the size of the loan book and long-term liabilities, suggesting leveraged financing.

• Leverage and Risk: The £3m bank loan secured on third-party assets is a significant liability. Although secured, this introduces a risk if loan repayments from debtors slow or default. The company’s ability to service this debt depends heavily on the performance and timely repayment of its loan portfolio.

• Profitability and Growth: The company has accumulated retained earnings (£307,736), reflecting profitable operations since inception in 2021. No employees are recorded, suggesting a lean structure which may reduce overhead.

• Governance and Control: The company is wholly owned and controlled by District and County Investments Limited, ensuring clear decision-making lines.

• Going Concern: Directors have confirmed no material uncertainties about the company’s ability to continue operating, which is a positive sign.

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4. Recommendations: Steps to Improve Financial Wellness

1. Monitor Loan Portfolio Quality:
   Regularly assess the credit risk and collectability of the loans receivable to prevent symptoms of distress such as loan defaults or delayed repayments which could impair liquidity.

2. Manage Debt Servicing Prudently:
   Maintain clear schedules for repayment of the long-term bank loan and ensure interest payments are met on time to avoid triggering financial strain or covenant breaches.

3. Increase Equity Buffer:
   Consider increasing paid-up share capital or retained earnings through reinvestment of profits to strengthen the equity base, improving solvency ratios and absorbing potential shocks.

4. Diversify Revenue Streams:
   Explore opportunities to diversify income beyond bridging and development loans to reduce concentration risk. This could include offering consultancy or expanding into complementary financial services.

5. Maintain Transparent Governance:
   Continue clear reporting and compliance with filing deadlines. Transparent governance reassures stakeholders and supports creditworthiness.

6. Cash Flow Management:
   Keep tight control over working capital despite currently strong liquidity. Since assets are largely loans receivable, ensuring timely collections is critical.

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