HOBBS PROPERTY PORTFOLIO LTD

Executive Summary

HOBBS PROPERTY PORTFOLIO LTD is experiencing significant financial distress, characterized by negative working capital and shareholders' funds, indicating liquidity and solvency challenges. Without prompt restructuring and improved liquidity management, the company's financial viability remains at risk. Immediate strategic action is essential to stabilize its financial health and ensure continuity.

HOBBS PROPERTY PORTFOLIO LTD - Analysis Report

Company Number: 13399607

Analysis Date: 2025-07-20 14:48 UTC

Financial Health Assessment for HOBBS PROPERTY PORTFOLIO LTD

---

1. Financial Health Score: D

Explanation:
The company exhibits serious symptoms of financial distress, primarily due to persistent net liabilities (negative shareholders’ funds) and significant current liabilities exceeding current assets by a wide margin. Although fixed assets have grown, the working capital position is weak, indicating liquidity challenges. The overall health score is a D, reflecting an urgent need for remedial action to restore financial stability.

---

2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	387,539	Indicates ownership of tangible property assets, a positive sign in real estate. Growth from 260k to 387k shows investment or revaluation.
Current Assets	4,081	Very low liquid assets, insufficient to cover short-term obligations.
Current Liabilities	400,941	Very high short-term debts, significantly exceeding current assets, a red flag for liquidity crisis.
Net Current Assets (Working Capital)	-396,860	Negative working capital indicates inability to cover short-term debts, a symptom of cash flow distress.
Shareholders’ Funds	-9,321	Negative equity means liabilities exceed assets, signaling insolvency on a balance sheet basis.
Trend in Equity	-4,360 (2023) to -9,321 (2024)	Worsening net asset position indicates ongoing losses or increased liabilities.

---

3. Diagnosis

HOBBS PROPERTY PORTFOLIO LTD is currently showing clear symptoms of financial distress:

• Liquidity Stress: The company’s current liabilities dwarf its current assets, leading to a dangerously negative working capital position. This means the company may struggle to meet short-term obligations without external support or refinancing.

• Solvency Concerns: Negative shareholders’ funds indicate that total liabilities exceed total assets, a sign of balance sheet insolvency. This is a critical symptom often seen in companies facing financial difficulty.

• Asset Growth vs. Liability Growth: While fixed assets have increased (likely property holdings), current liabilities have increased disproportionately, suggesting that the company may be heavily leveraged or relying on short-term borrowing to finance asset acquisition.

• No Employees: The absence of employees suggests the company might be an investment or holding entity, possibly managing property portfolios rather than operating active business units.

• Micro-Entity Reporting: The company reports under micro-entity standards with no audit, which limits transparency but is typical for small private companies.

In summary, the company is in a fragile financial state, with liquidity and solvency issues that could threaten its operational continuity if not addressed promptly.

---

4. Recommendations

To improve the financial health and restore a "healthy cash flow" status, the company should consider:

1. Liquidity Management:

   • Negotiate longer payment terms or restructure existing short-term liabilities to reduce immediate cash flow pressures.
   • Explore additional financing options, such as equity injections or longer-term loans, to replace short-term debt.

2. Asset Utilization:

   • Assess the fixed assets for potential sale or refinancing to generate liquidity.
   • Review property portfolio performance to ensure assets generate adequate rental income or returns.

3. Cost Control:

   • Although no employees are reported, ensure all operational expenses are optimized and non-essential costs minimized.

4. Financial Restructuring:

   • Engage with creditors early to discuss restructuring options and avoid insolvency proceedings.
   • Consider professional financial advisory to develop a turnaround plan.

5. Regular Monitoring:

   • Establish robust financial forecasting and monitoring to identify early warning signs.
   • Improve transparency by possibly moving beyond micro-entity reporting when financially feasible.

Failure to act on these recommendations risks worsening financial health, potential insolvency, or forced liquidation.

---