GEMENC PROPERTY MANAGEMENT LTD

Executive Summary

GEMENC PROPERTY MANAGEMENT LTD shows signs of financial distress with negative equity and working capital deficit as of January 2024, reflecting liquidity and solvency challenges typical of a micro-entity in a capital-intensive sector. Immediate actions to improve cash flow, strengthen capital, and control costs are crucial to stabilize and restore financial health. Without intervention, the company risks deeper financial strain.

GEMENC PROPERTY MANAGEMENT LTD - Analysis Report

Company Number: 13128135

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

Financial Health Assessment for GEMENC PROPERTY MANAGEMENT LTD

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1. Financial Health Score: D

Explanation:
The company exhibits signs of financial distress with negative net assets and working capital deficit as of the latest financial year ending January 31, 2024. Although still active and compliant with filing deadlines, the balance sheet weakness and erosion of shareholders’ funds indicate significant strain on financial health.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	1,260	Minimal long-term assets; typical for micro-entity.
Current Assets	20,349	Short-term assets (likely cash or receivables).
Current Liabilities	24,038	Obligations due within one year; higher than current assets.
Net Current Assets	-3,689	Negative working capital; symptom of liquidity strain.
Total Assets less Current Liabilities	-2,429	Overall net liabilities; unhealthy financial position.
Net Assets (Shareholders’ Funds)	-2,429	Negative equity; indicates accumulated losses or debt exceeding assets.
Share Capital	100	Minimal capital base; typical for a micro-entity startup.

Interpretation:

• Healthy cash flow is indicated by positive net current assets; here, the company shows a working capital deficit, a classic symptom of financial distress, meaning it may struggle to meet short-term obligations.
• Negative net assets suggest the company’s liabilities exceed its assets, signaling possible insolvency risks if the trend continues.
• The company holds limited fixed assets, which is typical for its micro entity status but may limit collateral availability for financing.

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3. Diagnosis

The financial "vital signs" reveal that GEMENC PROPERTY MANAGEMENT LTD is currently under financial stress. The deterioration from positive net assets (£100) in prior years to a net liability of £2,429 in 2024 signals operational losses or increased liabilities not matched by asset growth. Negative working capital indicates that the company’s short-term debts exceed its liquid assets, which may cause cash flow difficulties.

Given the company's industry (buying and selling of own real estate), a capital-intensive sector, the lack of substantial fixed assets and negative equity raises concerns about its ability to sustain operations without additional funding or improved profitability. The absence of employees suggests a lean operation, possibly relying on external contractors or minimal activity.

The change in directors and the current controlling shareholder’s full ownership suggests centralized decision-making but also concentration of risk.

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4. Recommendations

To improve financial wellness and avoid worsening symptoms of distress, the company should consider the following actions:

• Improve Liquidity:

  • Accelerate collection of receivables and manage payables to improve working capital.
  • Consider short-term financing options to cover the negative cash gap.

• Strengthen Capital Base:

  • Injection of additional equity capital by the shareholder or external investors to restore positive net assets.
  • Explore grants or low-cost loans suitable for micro-entities in real estate.

• Cost Control & Revenue Growth:

  • Review operating expenses and reduce non-essential costs.
  • Develop strategies to increase turnover, possibly by focusing on profitable property transactions.

• Financial Monitoring:

  • Implement regular cash flow forecasting and budgeting to anticipate liquidity issues.
  • Engage professional financial advice to restructure liabilities if needed.

• Governance and Reporting:

  • Maintain timely filings and transparent reporting to build stakeholder confidence.
  • Consider appointing a financial advisor or part-time CFO for expertise.

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