Company Number: 12712000

Analysis Date: 2025-07-29 18:59 UTC

Financial Health Assessment of Hayes House Ltd (as at 31 July 2024)

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1. Financial Health Score: D

Explanation:
The company shows significant financial distress, with persistent and increasing net current liabilities and negative shareholders’ funds. The balance sheet reveals a critical liquidity problem and an over-reliance on creditor support to maintain operations. While the company remains active and has no overdue filings, its financial "vital signs" indicate serious symptoms of distress that require urgent attention.

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2. Key Vital Signs:

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	19,831	847,899	Sharp decline in liquid and short-term assets, indicating worsening liquidity.
Cash at Bank	3,553	3,853	Critically low cash reserves, insufficient for near-term obligations.
Debtors	16,278	17,808	Debtor levels stable but small relative to liabilities; may indicate collection challenges or low sales.
Current Liabilities	258,450	970,040	Substantial decrease, possibly due to debt restructuring or creditor agreements, but still very high.
Net Current Assets (Working Capital)	-238,619	-122,141	Negative working capital, a key symptom of liquidity crisis. Company cannot cover short-term debts with current assets.
Shareholders’ Funds (Equity)	-238,521	-122,143	Deeply negative equity signals accumulated losses, eroded net worth, and insolvency risk.
Secured Loans	0	762,721	Significant reduction in secured debt, possibly through repayment or restructuring; however, overall liabilities remain high.

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3. Diagnosis:

Symptom Analysis:

• The company is showing classic symptoms of financial distress such as negative net assets and working capital, indicating it owes more than it owns.
• Low cash reserves coupled with high current liabilities suggest a "cash starvation" problem, limiting operational flexibility.
• Negative shareholders’ funds reveal accumulated losses; the company’s financial health is comparable to a patient suffering from chronic illness without sufficient recovery.
• The reduction in liabilities from 2023 to 2024 hints at some creditor concessions or debt repayment, but current liabilities still vastly outweigh assets.
• The company’s going concern statement notes dependency on creditor support, indicating vulnerability if this support ceases.
• No employees and minimal operational disclosures suggest the company might be in a holding or restructuring phase, or not actively trading profitably.

Underlying Issues:

• Liquidity is critically impaired, which is the life-blood of business health.
• Negative equity points to insolvency risk unless there is an injection of fresh capital or debt restructuring.
• High reliance on creditors for survival is a precarious position, similar to a patient dependent on continuous medication without underlying cure.

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4. Recommendations:

1. Immediate Cash Flow Management:

   • Prioritize improving cash inflows by accelerating debtor collections.
   • Negotiate extended payment terms with creditors to ease short-term pressure.

2. Capital Injection or Debt Restructuring:

   • Seek equity injections from shareholders or new investors to strengthen the balance sheet.
   • Engage with secured creditors to restructure or refinance existing debts to improve solvency metrics.

3. Operational Review:

   • Assess whether current business operations are sustainable or if divestment of non-core assets is necessary.
   • Consider cost-cutting measures or strategic pivots to improve profitability.

4. Professional Financial Advisory:

   • Consult insolvency practitioners or turnaround specialists to evaluate options such as administration or voluntary arrangements if recovery is uncertain.

5. Maintain Compliance:

   • Continue timely filing of accounts and confirmation statements to avoid penalties and maintain creditor and market confidence.

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Summary:

Hayes House Ltd is currently in a fragile financial state characterized by negative net assets, severe liquidity constraints, and a reliance on creditor support to continue trading. Immediate strategic financial interventions are essential to stabilize cash flow and recapitalize the business to avoid insolvency risks.

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