DORMER PROPERTY LIMITED

Executive Summary

Dormer Property Limited faces significant financial stress characterized by low liquidity, negative working capital, and high debt levels, threatening its financial stability. While it holds valuable real estate assets, improving cash flow and restructuring debt are critical to restoring financial health. Immediate action and close financial monitoring are essential to avoid deterioration.

DORMER PROPERTY LIMITED - Analysis Report

Company Number: 13145364

Analysis Date: 2025-07-20 12:42 UTC

Financial Health Assessment Report for Dormer Property Limited

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1. Financial Health Score: D

Explanation:
Dormer Property Limited shows clear symptoms of financial distress primarily due to persistent negative working capital, very low net assets, and significant long-term borrowings relative to equity. While the company benefits from valuable investment property assets, the cash flow and liquidity metrics indicate vulnerability. The financial "vital signs" suggest the company is in a fragile state requiring intervention to improve operational cash flow and reduce liabilities.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Cash & Cash Equivalents	£15,851	Very low cash reserves, down from £71,664 last year; indicates constrained liquidity ("weak pulse").
Current Liabilities	£192,164 (within 1 year) + £374,070 (long term)	High short and long-term liabilities; risk of liquidity crunch and repayment pressure.
Net Current Assets	-£176,313	Negative working capital ("symptom of distress")—the company cannot cover short-term debts with current assets.
Net Assets (Equity)	£1,383	Very low equity base relative to liabilities; almost "emaciated" balance sheet indicating financial fragility.
Investment Property Value	£552,964	Significant fixed asset base; a key strength and source of collateral and value.
Retained Earnings	-£3,822	Negative retained earnings suggest accumulated losses or distributions exceeding profits.
Debt to Equity Ratio	Over 270:1	Extremely high leverage; high financial risk and possible solvency concerns.

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3. Diagnosis: What the Financial Data Reveals

Dormer Property Limited's financial "vitals" indicate a company heavily reliant on debt financing, with cash flow insufficient to meet short-term obligations comfortably. The negative net current assets reveal "symptoms" of liquidity strain, meaning the company may struggle to pay suppliers or creditors on time without further cash injections or refinancing.

The large investment property asset offers a "stable organ" in the form of a valuable asset base; however, this asset is illiquid and the company has not shown signs of revaluing it recently by an independent valuer, which may mask true market value fluctuations.

The very thin equity base and negative retained earnings are warning signs of prolonged operating losses or capital depletion, increasing financial vulnerability. The fact that cash reserves have dropped significantly over the last year exacerbates this risk.

Overall, the diagnosis is a company with serious liquidity and solvency challenges that could threaten its long-term viability unless corrective measures are taken promptly.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Improve Liquidity and Cash Flow Management:
  Implement tighter control on cash outflows and accelerate receivable collections (if any). Consider negotiating longer payment terms with creditors to ease short-term pressure.

• Restructure Debt:
  Engage with lenders to refinance or restructure existing borrowings to reduce immediate repayment burdens and interest expense, improving cash flow breathing room.

• Asset Review and Monetisation:
  Consider obtaining an independent valuation of the investment property to verify fair market value and explore opportunities to monetise or leverage this asset (e.g., sale and leaseback, equity release).

• Capital Injection:
  Explore options for equity injections from existing shareholders or new investors to strengthen the balance sheet and reduce reliance on debt.

• Cost Reduction:
  Review operational expenses critically and reduce overheads to limit cash burn.

• Financial Monitoring:
  Institute regular financial health checks and cash flow forecasting to detect emerging symptoms early and adjust strategy accordingly.

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Medical Analogy Summary

Dormer Property Limited currently exhibits symptoms akin to a patient with severe dehydration (low cash) and high blood pressure (excessive debt). While the "heart" of the business—the investment property—is strong, the company’s "circulatory system" (working capital) is compromised, risking organ failure (insolvency) without urgent intervention.

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