IVANETTE PROPERTIES LIMITED

Executive Summary

IVANETTE PROPERTIES LIMITED is currently navigating a critical growth phase marked by significant property investments and rising debt levels. While the company’s net asset position has improved, a sharp decline in cash reserves and increased borrowing signal liquidity challenges and heightened financial risk. Immediate focus on cash flow management and debt servicing is essential to stabilize financial health and support sustainable growth.

IVANETTE PROPERTIES LIMITED - Analysis Report

Company Number: 14175219

Analysis Date: 2025-07-29 18:36 UTC

Financial Health Assessment for IVANETTE PROPERTIES LIMITED

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1. Financial Health Score: D

Explanation:
The company shows signs of financial instability despite recent asset acquisition. While fixed assets have increased significantly, there are symptoms of cash flow stress and high long-term liabilities relative to assets. The net asset position has just turned positive but remains fragile, indicating a business still in recovery or transition phase.

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2. Key Vital Signs:

Metric	2024	2023	Interpretation
Fixed Assets (Land & Buildings)	£619,500	£0	Significant investment in property assets, indicating expansion or capital commitment.
Current Assets (Cash + Debtors)	£19,329	£350,001	Sharp decline in cash reserves, which is a warning sign for liquidity.
Current Liabilities	£7,556	£900	Increased short-term obligations, but still manageable relative to current assets.
Net Current Assets (Working Capital)	£11,773	£349,101	Substantial drop in working capital; current assets barely cover short-term liabilities now.
Creditors due after one year (Long-term liabilities)	£622,631	£350,577	Long-term debts have nearly doubled, increasing financial risk.
Net Assets (Equity)	£8,642	£-1,476	Turned positive from negative net equity, but still very low relative to liabilities.

Interpretation of Vital Signs:

• The large increase in fixed assets suggests the company has acquired property or development assets, consistent with their SIC codes related to real estate development and letting.
• However, the dramatic reduction in cash from £350k to just under £20k signals a "symptom of distress" in liquidity – the company has limited ready cash for day-to-day operations.
• Current liabilities have increased, but remain small compared to current assets, so short-term solvency is not immediately threatened, but the shrinking working capital is a concern.
• The long-term debt burden has nearly doubled, which may indicate increased borrowing to finance asset purchases but raises questions about the company's ability to service this debt.
• The positive net asset position is a good sign but the margin is very thin, exposing the business to risks from any adverse changes in asset values or increased liabilities.

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3. Diagnosis:

The company is in a transitional phase characterized by significant capital investment in tangible fixed assets (likely property). The financial profile is akin to a patient who has undergone a major medical procedure — the "operation" being the asset acquisition — but whose recovery is still fragile. The sharp depletion of cash reserves is a warning "symptom" that operational cash flow may be under strain, possibly due to upfront capital expenditure or limited revenue inflows.

The increase in long-term creditors suggests reliance on external financing, which adds to financial risk if income generation from these assets is delayed or insufficient. The thin positive equity means the company has little buffer to absorb shocks or losses.

In summary, while the company is not in immediate danger of insolvency, it exhibits symptoms of financial distress primarily due to liquidity constraints and high leverage. The business appears to be investing for future growth but must manage its cash flow carefully to avoid further stress.

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4. Recommendations:

1. Improve Cash Flow Management:

   • Prioritize collection of receivables and control cash outflows tightly.
   • Explore short-term financing options or credit facilities to bolster liquidity and avoid cash shortages.

2. Debt Servicing Plan:

   • Negotiate with creditors for manageable repayment terms given the high long-term liabilities.
   • Monitor interest and principal payments closely to prevent default risk.

3. Asset Utilization:

   • Accelerate letting or sale of property assets to generate cash inflows and reduce debt dependency.
   • Review asset portfolio for any non-performing or under-utilized properties.

4. Operational Efficiency:

   • Streamline overheads and reduce non-essential expenses to conserve cash.
   • Consider phased development projects to avoid overextending financial commitments.

5. Financial Monitoring:

   • Regularly review financial metrics and cash forecasts to detect early warning signs.
   • Prepare contingency plans for adverse market conditions or delays in property sales/letting.

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Executive Summary