KEYLAKE PROPERTIES LIMITED

Executive Summary

KEYLAKE PROPERTIES LIMITED currently exhibits financial stress characterized by negative net assets and working capital deficits, despite holding valuable property assets. The company's liquidity position is precarious, with low cash reserves and significant debt, requiring urgent attention to debt restructuring and cash flow management. Proactive financial governance and asset management are vital to improve its future financial health and operational sustainability.

KEYLAKE PROPERTIES LIMITED - Analysis Report

Company Number: 13884944

Analysis Date: 2025-07-29 17:39 UTC

Financial Health Assessment for KEYLAKE PROPERTIES LIMITED

Date of Report: 2024-11-01 (approximate based on latest accounts and authorisation date)

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1. Financial Health Score: D (Below Average)

Explanation:
The company is currently showing persistent net liabilities, negative working capital, and modest cash reserves relative to its liabilities. These "symptoms" indicate financial distress or strain, especially in short-term liquidity, which could impair operational flexibility. The absence of audit and reliance on director loans add to caution. However, the company is still active and holding valuable investment property, which is a positive asset base.

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2. Key Vital Signs (Critical Financial Metrics):

Metric	2024 Value	Interpretation
Net Assets	£-5,110	Negative net worth—liabilities exceed assets, indicating a balance sheet deficit ("underweight" on financial health).
Net Current Assets	£-9,282	Negative working capital ("symptom of liquidity strain")—current liabilities exceed current assets, warning of short-term cash flow pressure.
Cash at bank	£6,324	Low cash buffer relative to current liabilities (£283,538); "healthy cash flow" is lacking.
Current Liabilities	£15,606	Includes directors' loans, which are a form of internal funding but still a liability due within one year.
Non-current Liabilities	£283,538	Significant long-term borrowings, including bank loans and other borrowings, indicating high leverage.
Investment Property	£287,710	Key asset base, fairly stable in value, providing collateral and potential future liquidity.

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3. Diagnosis:

• Balance Sheet Condition: The company shows persistent net liabilities (negative shareholders' funds) for the past two years, reflecting accumulated losses or funding gaps. While investment property is a strong asset, the liabilities just about match total assets, leaving very little equity cushion.

• Liquidity & Cash Flow: Negative net current assets and low cash reserves are "symptoms of financial distress." The working capital deficit suggests the company may struggle to meet short-term obligations without external support or refinancing.

• Leverage & Funding: Heavy reliance on loans, including directors’ loans and bank borrowings, points to high financial gearing. The increase in other borrowings in 2024 adds to the debt burden.

• Operational Activity: No employees and minimal turnover figures disclosed (likely as a property holding entity). The company’s financial health is closely tied to property market conditions and the ability to service debt.

• Governance & Reporting: Exemption from audit and small companies regime filing indicates limited transparency, which can mask underlying risks. Directors are personally involved in funding, which can be a double-edged sword (supportive but not sustainable long-term).

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4. Prognosis (Future Financial Outlook):

• The company’s future financial health depends heavily on the property market and refinancing capabilities. If property values hold or improve, this provides an opportunity to restructure debt or raise equity.
• Persistent negative working capital and small cash reserves are risks for operational continuity if creditors demand repayment or if the company faces unexpected expenses.
• Without improving liquidity or reducing debt, the company may face increased financial strain, potentially leading to creditor pressure or insolvency risks.
• Proactive financial management and possibly restructuring of liabilities will be critical to improve the prognosis.

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5. Recommendations (Treatment Plan):

1. Improve Liquidity:

   • Negotiate extended payment terms with creditors to alleviate short-term cash pressure.
   • Convert short-term directors’ loans to longer-term arrangements to improve working capital ratios.
   • Explore opportunities to increase cash reserves via equity injection or asset sales if feasible.

2. Debt Management:

   • Engage with lenders to refinance or restructure debt, aiming to reduce interest costs and spread repayments.
   • Consider capitalising some of the directors’ loans if possible, to strengthen equity base.

3. Financial Monitoring:

   • Implement detailed cash flow forecasting and regular liquidity monitoring to catch distress signals early.
   • Prepare for timely accounts filing and consider voluntary audit to improve stakeholder confidence.

4. Asset Management:

   • Review investment property portfolio for potential repositioning to enhance returns or liquidity.
   • Ensure property valuations are up-to-date and seek professional advice on market conditions.

5. Governance & Transparency:

   • Maintain clear communication with shareholders and creditors about financial position and recovery plans.
   • Consider adding an independent financial advisor or non-executive director to improve governance.

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Medical Analogy Summary:

KEYLAKE PROPERTIES LIMITED shows symptoms of financial strain with a weak liquidity "pulse" and a "deficient cardiovascular system" represented by negative net assets. The company’s "vital organs" (investment property assets) are intact but burdened by high "blood pressure" (debt levels). Without intervention, the risk of "financial collapse" increases. Prompt "treatment" focusing on liquidity and debt restructuring is essential to restore financial wellness.

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