GRANARY SQUARED PROPERTIES LIMITED

Executive Summary

Granary Squared Properties Limited has grown its fixed asset base significantly but faces critical liquidity issues and a near-zero equity buffer, putting it at risk of financial distress. Immediate actions on cash flow improvement, debt restructuring, and capital reinforcement are essential to stabilize its financial health.

GRANARY SQUARED PROPERTIES LIMITED - Analysis Report

Company Number: 13109909

Analysis Date: 2025-07-19 12:25 UTC

Financial Health Assessment of GRANARY SQUARED PROPERTIES LIMITED (As at 31 March 2025)

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1. Financial Health Score: D

Explanation:
The company demonstrates significant financial distress symptoms, primarily a severe liquidity crunch and a precariously low equity base. Despite asset growth, liabilities have increased disproportionately, leading to a near-zero net asset position. This score reflects a company in a fragile state, needing urgent financial management to restore stability.

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2. Key Vital Signs

Metric	2025 Value (£)	Interpretation
Fixed Assets	338,073	Healthy growth; indicates property portfolio expansion.
Current Assets	5,233	Very low liquidity; potential cash flow issues.
Cash	5,175	Minimal cash reserve; risks inability to cover short-term obligations.
Debtors	58	Negligible receivables; low incoming cash from clients.
Current Liabilities	203,025	Very high short-term debts; major red flag.
Net Current Assets	-134,941	Negative working capital; "symptom of distress" indicating liquidity problems.
Long-Term Liabilities	203,025	Heavy reliance on external financing; large debt burden.
Net Assets / Equity	107	Barely positive equity; indicates near insolvency risk.
Shareholders' Funds	107	Equity is negligible; company lacks financial buffer.

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3. Diagnosis

The company’s financial "vital signs" reveal a case akin to a patient with a strong skeletal system (fixed assets) but critically poor blood circulation (cash flow and liquidity). The fixed assets have nearly doubled due to property acquisitions, which is a positive sign of growth and capital investment.

However, this asset growth is financed predominantly through debt, with current liabilities and long-term borrowings vastly outweighing liquid assets. The negative net current assets (-£134,941) mean the company cannot cover its short-term debts with its short-term assets — a classic symptom of liquidity distress.

The equity base has shrunk dramatically from £1,163 in 2024 to only £107 in 2025, suggesting accumulated losses or financial strain eroding shareholder value. This minimal equity acts like a thin immune system, leaving the company vulnerable to shocks.

The company's accounting policies show investment properties are measured at fair value with gains or losses impacting profit or loss, which can cause volatility in reported profits but does not offset the fundamental liquidity issues.

Overall, the financial data diagnose a company heavily leveraged with insufficient liquid resources to meet immediate obligations, placing it at risk of financial stress if operational cash flows do not improve.

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4. Recommendations

• Improve Liquidity Management:
  Immediate focus on improving cash flow to alleviate the liquidity crunch. This might include negotiating extended payment terms with creditors, accelerating debtor collections, or liquidating non-core assets.

• Debt Restructuring:
  Engage lenders to restructure existing debt to reduce short-term liabilities and extend maturities, thereby easing working capital pressure.

• Equity Injection:
  Consider capital raising options to bolster shareholders’ funds and provide a financial buffer against operational risks.

• Operational Cash Flow Enhancement:
  Review rental income streams and operational expenses to identify opportunities to increase net cash inflows.

• Risk Monitoring:
  Implement rigorous financial monitoring to detect early warning signs of worsening liquidity or solvency conditions.

• Professional Advice:
  Given the fragile financial state, obtaining specialized financial advisory support is advised to navigate potential risks of insolvency.

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Summary

GRANARY SQUARED PROPERTIES LIMITED exhibits asset growth but suffers from severe liquidity shortages and an almost depleted equity base, signaling financial distress. Without timely intervention to improve cash flow and manage debt, the company risks deeper financial instability.