KB PROPERTIES (DERBYSHIRE) LIMITED

Executive Summary

KB PROPERTIES (DERBYSHIRE) LIMITED is currently operating with negative equity and working capital deficits, signaling financial distress and solvency risks. While its property assets remain stable, the company must urgently address liquidity issues and consider debt restructuring or capital infusion to restore financial health. Proactive management and strategic financial intervention are essential to avert further deterioration.

KB PROPERTIES (DERBYSHIRE) LIMITED - Analysis Report

Company Number: 13620985

Analysis Date: 2025-07-29 17:08 UTC

Financial Health Assessment: KB PROPERTIES (DERBYSHIRE) LIMITED

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1. Financial Health Score: D

The company’s financial health is currently weak, as reflected by persistent negative net assets and net current liabilities. While the fixed assets are stable, the company faces liquidity pressures and is technically insolvent on a balance sheet basis. The score ‘D’ indicates significant symptoms of financial distress that need addressing to restore health.

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2. Key Vital Signs

Metric	Value (2024)	Interpretation
Fixed Assets	£290,000	Stable long-term asset base, likely property investments typical for real estate companies.
Current Assets	£12,765	Very low short-term liquidity, barely covers immediate operational needs.
Current Liabilities	£95,332 (within 1 year)	High short-term obligations, greatly exceeding current assets, indicating liquidity strains.
Net Current Assets (Working Capital)	-£82,567	Negative working capital – company lacks sufficient short-term resources to cover immediate debts.
Creditors Due After One Year	£217,465	Significant long-term debt load, likely loans or mortgages secured against assets.
Net Assets (Equity)	-£10,032	Negative shareholders’ funds indicate insolvency on a balance sheet basis.
Employees	2	Small workforce consistent with micro-entity status.

Interpretation of Vital Signs:

• Liquidity Concern: The company exhibits symptoms of distress with negative net current assets. This “unhealthy cash flow” situation suggests difficulty meeting short-term debts without additional funding or asset sales.
• Solvency Risk: Negative net assets mean liabilities exceed total assets, a classic sign of insolvency risk. This condition must be monitored closely.
• Asset Stability: Fixed assets remain stable, indicating no recent disposals or impairments. This is a positive sign as the company retains its underlying property base.
• Debt Burden: The company carries a substantial long-term creditor balance relative to its asset base, raising concerns about the sustainability of its capital structure.

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3. Diagnosis

KB PROPERTIES (DERBYSHIRE) LIMITED shows clear symptoms of financial stress. Despite a stable property asset portfolio, the company is facing liquidity challenges, evidenced by negative working capital and shrinking equity. The persistent negative net assets over the reporting periods indicate ongoing erosion of shareholder value and potential solvency issues.

The company’s micro-entity status means it operates on a small scale, but even within this scope, the financials indicate that liabilities significantly outweigh assets, a critical warning sign. The absence of auditor scrutiny (exemption under micro-entity rules) means the accounts are unaudited, which may limit insight into financial nuances but does not negate the evident balance sheet weakness.

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4. Recommendations

To improve financial wellness, the company should consider the following specific actions:

• Liquidity Management: Establish a robust cash flow forecast to anticipate and manage near-term obligations. Explore short-term financing options or renegotiate payment terms with creditors to alleviate liquidity squeeze.
• Debt Restructuring: Engage with lenders to restructure long-term debt, potentially extending maturities or reducing interest costs to ease financial burden.
• Equity Injection: Consider raising additional equity capital from existing shareholders or new investors to restore positive net worth and improve solvency.
• Asset Review: Evaluate fixed assets for potential unlocking of value through sale or refinancing. This could provide immediate cash inflows to support operations.
• Cost Control: With only 2 employees, labour costs are small, but review all expenses for possible reduction to conserve cash.
• Professional Advice: Seek advice from insolvency practitioners or financial advisors early if there is a risk of worsening financial distress, to explore turnaround strategies or protective measures.

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