DMP PROPERTY LETTINGS LTD

Executive Summary

DMP PROPERTY LETTINGS LTD, a newly formed property letting company, currently faces liquidity challenges and a negative net asset position due to high liabilities exceeding its investment property assets. While the company holds valuable fixed assets, its cash flow and working capital require urgent management to stabilize financial health. With focused debt restructuring and improved cash management, the company can progress toward sustainable operations and financial recovery.

DMP PROPERTY LETTINGS LTD - Analysis Report

Company Number: 14935275

Analysis Date: 2025-07-20 12:31 UTC

Financial Health Assessment for DMP PROPERTY LETTINGS LTD

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1. Financial Health Score: D

Explanation:
The company shows signs of early-stage distress with net liabilities and negative working capital. While it holds significant investment property assets, the current liabilities and long-term debts outweigh assets, leading to a negative net asset position. This grade reflects a company in its infancy with structural imbalances that require attention to avoid financial deterioration.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Investment Property (Fixed Assets)	£401,622	Strong asset base in property, a vital organ of the business.
Current Assets	£4,503	Very low liquidity; cash and debtors are minimal.
Current Liabilities	£138,918	Short-term debts are high relative to current assets, indicating liquidity pressure ("cash flow weakness").
Net Current Assets	-£134,415	Negative working capital ("symptom of cash flow distress"), risk of inability to meet short-term obligations.
Creditors Due After 1 Year	£277,160	Significant long-term debt ("heavy liability burden"), could strain future financial health.
Net Assets (Shareholders Funds)	-£9,953	Overall liabilities exceed assets ("balance sheet weakness"), indicating insolvency risk if sustained.

Additional Observations:

• No employees, indicating a lean operational model but also limited internal resources.
• Director David Michael Phillips holds full control and equity, meaning decision-making is centralized.
• The company is newly incorporated (June 2023) with only one financial year of data, limiting trend analysis.

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3. Diagnosis

DMP PROPERTY LETTINGS LTD is in an early but fragile financial state. The core "vital sign" of net current assets is negative by a large margin, signalling liquidity challenges and potential "cash flow distress." Despite holding a substantial investment property asset (£401,622), the company's debts—both current and long-term—outweigh the total assets, leading to negative shareholders' funds.

The negative net asset position is a "symptom of financial strain," often seen in start-ups or companies investing heavily in capital assets funded by debt. The absence of audited accounts and income statement limits deeper profitability assessment, but the current snapshot suggests the company is reliant on external financing, with a high gearing ratio (debt to assets).

This situation is not uncommon in newly established property letting businesses, where initial investments and loans precede steady rental income and profit generation. However, the imbalance between short-term liabilities and liquid assets presents a risk of cash shortages, which could impede operational stability if not managed carefully.

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4. Recommendations

• Improve Liquidity ("Restore Healthy Cash Flow"):
  Increase cash reserves by negotiating longer payment terms with creditors or securing additional short-term financing. Prompt collection of any receivables and careful cash flow forecasting are essential.

• Debt Management ("Lighten the Liability Burden"):
  Explore refinancing options to reduce the current portion of liabilities or convert some short-term debts into longer-term loans. Consider debt restructuring to spread out repayment obligations and reduce immediate pressure.

• Asset Utilisation ("Leverage Investment Property"):
  Generate rental income or other cash flows from the investment property as soon as possible. If the property is vacant or underused, consider leasing or selling non-core assets to bolster working capital.

• Financial Monitoring and Reporting:
  Prepare detailed management accounts regularly to monitor profitability and cash flow. Consider obtaining an audit or review to increase financial transparency and stakeholder confidence.

• Strategic Planning:
  Develop a business plan focused on achieving positive cash flow and profitability within the next 12 to 24 months. Set clear financial milestones to track progress from a "symptomatic" to a "healthy" financial state.

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