ILG (HARLESTON) LIMITED

Executive Summary

ILG (HARLESTON) LIMITED has demonstrated a significant financial recovery, moving from negative net assets to a strong positive working capital and equity position. The company’s financial health is solid, with good liquidity and solvency, positioning it well for future stability in the building development sector. Maintaining vigilant cash flow management and prudent operational control will be critical for continued financial wellness.

ILG (HARLESTON) LIMITED - Analysis Report

Company Number: 13661940

Analysis Date: 2025-07-29 15:52 UTC

Comprehensive Financial Health Assessment: ILG (HARLESTON) LIMITED

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1. Financial Health Score: B

• Explanation: ILG (HARLESTON) LIMITED demonstrates a significant turnaround from a previous state of financial distress (negative net current assets and shareholders’ funds) to a robust positive working capital and equity position in the latest financial year. The score "B" reflects a generally healthy financial condition with strong liquidity and solvency indicators but acknowledges that the company is relatively young and still building its financial foundation.

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2. Key Vital Signs

Metric	Latest (FY ending 28-Feb-2025)	Interpretation
Current Assets	£635,593	Healthy level of liquid and short-term assets indicating good resource availability.
Current Liabilities	£334,405	Manageable short-term obligations relative to assets.
Net Current Assets (Working Capital)	£301,188	Strong positive working capital—a "healthy cash flow" sign indicating ability to cover short-term debts comfortably.
Shareholders' Funds	£301,188	Positive equity shows the company is solvent, with assets exceeding liabilities.
Trend in Net Current Assets	From -£2,171 in 2023 to +£301,188 in 2025	Marked improvement signaling effective financial management and operational progress.
Average Employees	4	Small headcount consistent with micro company status.
Account Category	Micro	Simplified reporting but still subject to financial discipline.
Industry	Development of building projects (SIC 41100)	Capital intensive sector where liquidity is critical.

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3. Symptoms Analysis & Diagnosis

• Symptoms of Past Distress: For the financial years ending 2021 and 2023, the company showed negative net current assets and shareholders’ funds, indicating that liabilities slightly exceeded assets—a sign of financial distress or undercapitalization. This could have implied difficulty meeting short-term obligations and challenges in funding operations.

• Recovery and Vitality Signs: By the financial year ending 2025, there is a clear "recovery" with net current assets rising to over £300k and shareholders’ funds turning positive by the same amount. This suggests effective management responses such as capital injections, improved cash management, or operational profitability.

• Liquidity and Solvency: With current assets nearly double current liabilities, the company has a comfortable liquidity buffer, reducing risk of short-term cash flow crises. Shareholders’ funds being positive and equal to net current assets confirms the absence of excessive leverage and a solid equity base.

• Operational Scale: A stable employee count of 4 indicates a lean operation, which may contribute to controlled overheads and cost efficiencies.

• Audit and Compliance: The company qualifies for micro-entity exemption and has no overdue filings, indicating good compliance health, which is crucial for maintaining stakeholder trust and avoiding penalties.

• Industry Context: Operating in building development, where cash flow timing can be volatile due to contract cycles and capital expenditure, the improved working capital is a positive sign of financial "fitness."

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4. Prognosis

Given the current trajectory, ILG (HARLESTON) LIMITED appears to be on a path toward sustained financial health. The improved liquidity and solvency metrics reduce immediate financial risks. However, as a micro company with a short operating history, it remains exposed to industry risks such as project delays, cost overruns, and market fluctuations. Continued prudent financial management and maintaining positive cash flow will be essential to avoid relapse into distress.

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5. Recommendations

• Maintain Strong Cash Flow Monitoring: Ensure ongoing vigilance in managing receivables and payables to preserve the healthy working capital.

• Build Reserves: Use surplus cash to build financial reserves to cushion against future project delays or economic downturns.

• Cost Control: Continue lean staffing and operational efficiency to maintain profitability margins.

• Strategic Planning for Growth: Consider incremental scaling aligned with cash flow capacity to avoid overstretching resources.

• Regular Financial Reviews: Implement quarterly financial health checks to identify any early "symptoms" of distress.

• Stakeholder Communication: Keep shareholders and lenders informed of financial position to maintain confidence and support.

• Risk Management: Monitor industry trends and project risks, considering insurance or contingencies to mitigate potential financial shocks.

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Medical Analogy Summary

The company had previously exhibited "symptoms of financial distress" such as negative working capital and shareholders' funds, akin to a patient with low vital signs. The latest financial data shows a strong "recovery" with improved liquidity and equity, resembling a patient moving from critical care to stable health. To maintain this "healthy state," ongoing monitoring, prudent management, and building financial resilience are essential to avoid relapse.

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