Company Number: 13058787

Analysis Date: 2025-07-20 13:29 UTC

Financial Health Assessment: Graves Thompson Property Limited

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1. Financial Health Score: Grade D

Graves Thompson Property Limited currently exhibits signs of financial strain. The company has persistent net liabilities, negative working capital, and minimal cash reserves relative to its current liabilities. These symptoms indicate a fragile financial condition requiring attention to improve liquidity and overall balance sheet strength.

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2. Key Vital Signs

Metric	2023 Value	Interpretation
Cash at Bank	£3,007	Very low cash reserve, indicating limited immediate liquidity ("weak pulse" in cash flow).
Current Liabilities	£60,950 (within 1 year) + £91,600 (after 1 year)	High level of debts due soon and in the medium term ("high blood pressure" of liabilities).
Net Current Assets	-£57,943	Negative working capital means the company owes more short-term than it owns in liquid assets ("shortness of breath" in liquidity).
Net Assets (Equity)	-£9,148	Negative equity indicates liabilities exceed assets, a "symptom of distress" and insolvency risk.
Share Capital	£4	Nominal share capital, minimal buffer for absorbing losses.
Tangible Fixed Assets	£140,395	Significant fixed asset base, mostly land and buildings, which may provide some collateral.
Loans from Directors	£58,351	Substantial financing from directors, interest-bearing, reflecting reliance on internal support.

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3. Diagnosis

The company’s financial "vital signs" reveal a business under strain:

• Liquidity Concern: The low cash reserves and negative net current assets reveal a liquidity crunch, akin to a patient struggling to breathe. The company may face difficulty meeting short-term obligations without additional cash inflows or refinancing.

• Balance Sheet Weakness: Negative net assets indicate that the company’s debts exceed its total assets, a sign of financial distress that could threaten going concern status if unresolved.

• Reliance on Director Loans: The company depends heavily on interest-bearing loans from directors to sustain operations, which is like relying on an external life support mechanism. This is not sustainable long-term without operational improvement or external funding.

• Asset Base: The company holds substantial tangible fixed assets (primarily property), which is a positive sign as these assets could potentially be leveraged or sold to improve financial health.

• Profitability and Cash Flow: The absence of positive retained earnings and minimal cash growth over recent years suggests the company is not generating sufficient profit or free cash flow to reduce liabilities.

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4. Recommendations

To restore financial wellness, Graves Thompson Property Limited should consider the following steps:

1. Improve Cash Flow Management

   • Tighten debtor collections and manage creditors prudently to improve working capital.
   • Explore short-term financing options or overdrafts with manageable terms to ease liquidity pressure.

2. Restructure Debt

   • Negotiate with lenders to extend loan maturities or reduce interest costs ("lowering the blood pressure" of liabilities).
   • Consider converting director loans into equity or longer-term instruments to strengthen the balance sheet.

3. Asset Utilization

   • Assess the potential to monetize or refinance fixed assets to generate cash without compromising core operations.
   • Evaluate property portfolio performance and consider strategic disposals or leasing to improve liquidity.

4. Operational Review

   • Conduct a thorough business review to identify cost reduction opportunities and enhance profitability.
   • Develop a sustainable business plan to return to positive retained earnings and build equity.

5. Stakeholder Communication

   • Maintain transparent communication with directors, creditors, and shareholders regarding financial challenges and recovery plans.

6. Professional Advice

   • Engage financial advisors or turnaround specialists early to assist with debt restructuring and cash flow improvement strategies.

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