GRAPEVINE PROPERTY INVESTMENTS 10 LIMITED

Executive Summary

Grapevine Property Investments 10 Limited is currently in a weak financial position characterized by negative equity and working capital deficits, predominantly sustained by loans from its parent company. While the company remains a going concern due to ongoing group support, its financial health score of D reflects significant risk and the need for strategic financial restructuring and cash flow improvement to ensure long-term viability.

GRAPEVINE PROPERTY INVESTMENTS 10 LIMITED - Analysis Report

Company Number: 12945613

Analysis Date: 2025-07-20 13:28 UTC

Financial Health Assessment: GRAPEVINE PROPERTY INVESTMENTS 10 LIMITED

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1. Financial Health Score: D

Explanation:
The company shows significant symptoms of financial distress, primarily a persistent net liability (negative equity) position and net current liabilities. The financials reveal ongoing dependency on loans from the parent group to sustain operations, indicating a fragile capital structure. While the company remains solvent due to group support, the current financial condition is weak, warranting close monitoring and corrective action.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Share Capital	1	Minimal equity base, typical for small companies.
Net Current Assets	-55,965	Working capital deficit; current liabilities exceed current assets substantially. This is a "symptom of liquidity stress."
Net Assets (Total Equity)	-55,965	Negative net worth indicates liabilities exceed assets, a "critical symptom" of financial distress.
Debtors (Trade Receivables)	1	Negligible receivables; no cash buffer from customers.
Creditors (Due within 1 year)	55,966	High short-term obligations, mostly loans from group undertakings.
Number of Employees	1	Very small operation, limiting revenue generation capacity.
Going Concern Status	Confirmed (supported by group loans)	Reliant on external support; going concern is viable only due to group backing.

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3. Diagnosis

The company is currently in a precarious financial state with the following observations:

• Negative Equity ("Net Liabilities"): The company’s liabilities exceed its assets by approximately £56k, indicating that from a balance sheet perspective, it is "underweight" or insolvent on a standalone basis. This is akin to a patient having dangerously low blood pressure — a critical red flag.

• Working Capital Deficit: The net current liabilities of £55,965 means the company cannot meet its short-term obligations with its short-term assets, a "liquidity symptom" signifying potential cash flow problems if support were withdrawn.

• Reliance on Group Loans: The creditor figure is largely made up of amounts owed to group undertakings (£51,466), which can be viewed as an internal lifeline or "intravenous drip," keeping the company alive. Without this, the company may face insolvency.

• Minimal Operational Activity: With only one employee (the director) and negligible debtors, the company’s business operations appear limited, potentially restricting income generation and recovery prospects.

• Going Concern Assumption: The director’s report confirms the company is a going concern based on continued group support. This is a positive sign but also underscores a dependency risk — if the parent group withdraws support, the company’s survival is at risk.

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4. Prognosis

Without significant changes, the company may continue to experience financial strain. The prognosis is guarded:

• Short-term outlook: Stable if group support continues. The company’s ability to meet liabilities depends heavily on the parent company’s willingness to provide funding.

• Long-term outlook: Uncertain unless the company improves its capital structure, reduces liabilities, or increases operating income. Persistent negative equity and working capital deficits are unsustainable over time without external intervention.

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5. Recommendations

To improve the financial "health" and strengthen the company's "vital signs," the following measures are advised:

1. Capital Injection or Debt Restructuring
   Consider an equity injection or convert existing group loans to equity to reduce net liabilities and improve the balance sheet. This is akin to replenishing vital fluids in a patient’s circulatory system.

2. Enhance Cash Flow Management
   Explore ways to increase operational cash inflows, possibly by expanding business activity or improving receivables collection, to reduce reliance on external loans.

3. Cost Control and Efficiency
   Maintain lean operations to minimize expenses while attempting to grow revenue streams.

4. Regular Financial Monitoring
   Implement periodic financial health checks focusing on liquidity ratios and net asset position to detect early signs of distress and take timely action.

5. Contingency Planning
   Prepare for scenarios where group support may be reduced or withdrawn, including identifying alternative funding sources or restructuring options.

6. Stakeholder Communication
   Maintain transparent communication with creditors and group companies about financial status and plans to manage expectations and support.

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