FOREGATE REGENERATION LIMITED

Executive Summary

Foregate Regeneration Limited is currently facing significant financial challenges, marked by negative working capital and net liabilities indicating distress in liquidity and solvency. While the company holds substantial fixed assets, it requires urgent measures to improve cash flow, restructure liabilities, and strengthen equity to avert potential financial deterioration. Compliance with filings is maintained, but detailed operational improvements and capital support are essential for a healthier financial future.

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Company Analysis

This analysis is opinion only and should not be interpreted as financial advice.

FOREGATE REGENERATION LIMITED - Analysis Report

Company Number: 13242176

Analysis Date: 2025-07-20 19:14 UTC

Financial Health Assessment: FOREGATE REGENERATION LIMITED


1. Financial Health Score: D

Explanation:
The company shows persistent net liabilities and negative working capital over multiple years, indicating financial distress. While it maintains fixed assets, the overwhelming current liabilities exceed current assets by a large margin, leading to a negative net asset position. The financial "vital signs" suggest the company is in a precarious condition, requiring urgent attention to improve liquidity and solvency.


2. Key Vital Signs

Metric 2024 Figure (£) Interpretation
Fixed Assets 477,849 Significant investment in long-term assets, possibly property/development projects. This is a positive asset base.
Current Assets 19,159 Very low short-term assets (cash, receivables, stock) indicating limited liquid resources.
Current Liabilities 501,147 High short-term debts and obligations due within a year; a major concern for liquidity.
Net Current Assets (Working Capital) -481,988 Large negative working capital ("symptom of distress"), indicating inability to cover short-term liabilities with short-term assets.
Net Assets (Shareholders’ Funds) -4,139 Negative net assets signify the company owes more than it owns; an unhealthy financial position.
Share Capital 3.00 Nominal share capital; minimal equity buffer available.

Additional Observations:

  • No profit and loss details are provided, but negative equity suggests accumulated losses or financial strain.
  • The company is classified as Micro and complies with filing deadlines, which shows regulatory compliance but limited scale.
  • Directors and control structure indicate a single corporate entity (Trinity Residential Holdings Ltd) holds majority control (75-100%), which may influence strategic decisions and potential capital injections.

3. Diagnosis

The company exhibits clear "symptoms of financial distress" primarily related to liquidity and solvency:

  • Liquidity Crisis: The low current assets against very high current liabilities indicate a strained cash flow position. The company may struggle to meet short-term obligations, risking supplier or creditor pressure.

  • Negative Net Assets: Persistent negative shareholders' funds suggest accumulated losses or financial erosion, weakening the company’s capital structure and shareholder confidence.

  • Asset Utilization: The presence of fixed assets valued at £477,849 shows investment in property or development projects consistent with its SIC codes (real estate letting and building development). However, these assets have not yet translated into positive net worth or improved liquidity.

  • No Audit Requirement: As a micro-entity, the company benefits from simplified reporting, but this limits transparency on profitability and operational cash flows, which are crucial for a more detailed health check.

Overall, the company is in a fragile financial state with poor liquidity and solvency, signaling a need for remedial actions to restore financial health.


4. Recommendations

To address the financial ailments and move towards recovery, consider the following steps:

  1. Improve Working Capital Management:

    • Accelerate collection of receivables and optimize stock levels if applicable.
    • Negotiate extended payment terms with suppliers to ease cash outflow.
    • Closely monitor short-term cash flow to avoid liquidity crunch.
  2. Seek Additional Capital or Funding:

    • Consider equity injection from existing shareholders or new investors to strengthen net assets.
    • Evaluate short or medium-term financing options to cover current liabilities and restructure debt.
  3. Asset Review and Monetization:

    • Assess the fixed assets for potential sale or refinancing opportunities to generate cash.
    • Ensure assets are productive and aligned with revenue-generating activities.
  4. Operational Efficiency:

    • Review project costs and overheads for possible reductions.
    • Enhance revenue streams from development and letting activities to generate positive operating cash flow.
  5. Regular Financial Monitoring:

    • Implement monthly financial reviews focusing on liquidity ratios and cash flow forecasts.
    • Engage professional financial advice to develop turnaround strategies.
  6. Stakeholder Communication:

    • Maintain transparent communication with creditors and investors to build trust and possibly negotiate terms.


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