HORISON GROUP LTD

Executive Summary

HORISON GROUP LTD shows signs of financial strain with negative equity and rising current liabilities despite increased current assets. While liquidity remains positive, the company’s financial structure requires urgent attention to avoid distress. Focused efforts on working capital management, cost control, and capital restructuring are essential to restore financial health and ensure sustainable operations.

HORISON GROUP LTD - Analysis Report

Company Number: SC725998

Analysis Date: 2025-07-29 19:37 UTC

Financial Health Assessment for HORISON GROUP LTD (As of 31 March 2024)

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1. Financial Health Score: D

Explanation:
The company shows symptoms of financial distress, reflected in negative shareholder funds and high current liabilities relative to current assets. Although the business has increased current assets significantly, the working capital remains tight due to substantial short-term obligations and accrued income. The overall financial position is fragile and requires urgent attention to restore healthy balance.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£2,869	Minimal investment in long-term assets; typical for a micro entity in services like advertising.
Current Assets	£124,980	Large increase from prior year (£8,285), indicating improved liquidity or receivables/inventory build-up.
Current Liabilities	£92,625	Significant rise from prior year (£4,186), possibly due to accrued expenses or deferred income.
Accruals and Deferred Income	£41,500	Newly reported in 2024, contributing to high current liabilities; may include unearned revenue or liabilities.
Net Current Assets (Working Capital)	£32,355 (124,980 - 92,625)	Positive but modest working capital, indicating some ability to cover short-term obligations.
Shareholders’ Funds (Net Assets)	-£6,276	Negative equity signals accumulated losses or high liabilities over assets, a key symptom of financial distress.
Average Employees	6	Stable workforce size, suggesting consistent operational scale.

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3. Diagnosis: Financial Condition and Business Health

• Liquidity and Solvency:
  HORISON GROUP LTD has expanded its current assets substantially, which is a positive sign akin to a "healthy cash flow boost." However, this is accompanied by a sharp increase in current liabilities and the emergence of accruals/deferred income (£41,500), which may reflect outstanding obligations or revenues not yet earned. The net current assets remain positive but slender, indicating limited buffer to absorb shocks.

• Capital Structure:
  The company’s shareholders’ funds have moved from a positive £4,099 in the previous year to a negative £6,276, indicating the company’s liabilities now exceed its assets. This negative equity is a warning sign, much like a patient showing signs of systemic stress—there may be underlying operational losses or capital shortfalls.

• Growth and Investment:
  Fixed assets remain minimal, which is not unusual for a micro-entity in the advertising sector. The company may be focusing on intangible assets such as brand or intellectual property, or simply operating asset-light.

• Operational Viability:
  Employment levels are stable, suggesting consistent operational capacity. However, the financial strain reflected in negative equity and high liabilities could threaten ongoing viability if not addressed.

• Governance and Control:
  Directors and persons with significant control hold balanced shares (25-50%), suggesting clear ownership and control structure, which is positive for decision-making agility.

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4. Recommendations: Steps to Improve Financial Wellness

• Tighten Working Capital Management:
  Review receivables and payables cycles to accelerate cash inflows and delay cash outflows where possible. This will enhance liquidity and create a buffer against short-term pressures.

• Investigate Accruals and Deferred Income:
  Clarify the nature of the £41,500 accruals and deferred income. Determine if these represent unearned revenues or liabilities requiring cash settlement. This "hidden symptom" needs early diagnosis to avoid surprises.

• Address Negative Equity:
  Consider capital injection from shareholders or restructuring of liabilities to restore positive shareholder funds. This is akin to strengthening the “immune system” of the company’s financial health.

• Cost Control and Profitability Review:
  Conduct a detailed profitability analysis to identify cost centers that may be draining resources. Implement cost controls to improve the P&L reserve and prevent further erosion of equity.

• Plan for Sustainable Growth:
  Balance asset-light operations with necessary investments to support service delivery and competitive positioning. Avoid overextension that could worsen liquidity.

• Regular Financial Monitoring:
  Establish monthly financial health checks focusing on cash flow forecasts, creditor aging, and equity position. Early detection of symptoms allows timely corrective action.

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