KPSR DEVELOPMENTS LIMITED

Executive Summary

KPSR DEVELOPMENTS LIMITED has made significant strides improving its balance sheet with stronger equity and much lower liabilities. Yet, its critically low cash position signals liquidity risk that needs urgent management focus. With parent company backing and better cash controls, the company is positioned for a stable financial future.

KPSR DEVELOPMENTS LIMITED - Analysis Report

Company Number: 13459166

Analysis Date: 2025-07-20 17:37 UTC

Financial Health Assessment of KPSR DEVELOPMENTS LIMITED

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1. Financial Health Score: B-

• Explanation: The company demonstrates a stable and improving financial position with positive net current assets and shareholders' funds, indicating healthy working capital and equity base. However, the very low cash balance and significant fluctuations in current liabilities and assets signal some caution, suggesting liquidity management needs attention to avoid symptoms of financial strain.

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2. Key Vital Signs

Metric	2024	2023	Interpretation
Current Assets	£175,321	£1,122,241	Sharp reduction in current assets, mainly due to a drop in stock from £945,837 to £0, which reflects asset turnover or sale.
Cash at Bank	£321	£25,403	Critically low cash reserves indicate potential liquidity stress—a "weak pulse" in cash flow terms.
Debtors	£175,000	£151,001	Slight increase in receivables; manageable but requires monitoring to avoid cash flow blockages.
Current Liabilities	£49,489	£1,023,792	Dramatic reduction in short-term creditors, which is positive—less pressure on immediate outflows.
Net Current Assets (Working Capital)	£125,832	£98,449	Positive and improving working capital, signaling an ability to cover short-term obligations comfortably.
Shareholders’ Funds (Equity)	£125,832	£98,449	Increasing equity base reflects retention of profits or capital injection, strengthening financial resilience.
Number of Employees	3	3	Small team consistent with small company status, implying focused management and controlled overheads.

Interpretation:
The sharp decrease in stock and current liabilities suggests the company has likely sold inventory or real estate holdings and paid down creditors, which improves solvency. However, the near depletion of cash reserves is a red flag signaling tight liquidity—akin to a patient showing normal vital signs but with low blood pressure, requiring intervention to prevent collapse.

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3. Diagnosis: Overall Financial Condition

KPSR Developments Limited is a small, privately owned real estate trading company showing signs of recovery and strengthening balance sheet health. The company has moved from a position near breakeven or slight deficit in shareholders' funds in earlier years to a positive equity position by 2023 and further improvement in 2024. The substantial reduction in current liabilities from over £1 million to under £50,000 is a significant improvement, reducing short-term financial stress.

However, the very low cash holding at the latest year-end poses a liquidity risk. This is the key symptom of distress: despite positive net working capital, the company’s "circulatory system" (cash flow) is weak. Outstanding debtors are increasing but still manageable, though collection effectiveness will be critical to maintaining operational health.

The company benefits from strong control by its parent (KPSR Holdings Limited) which owns 75-100% of shares and voting rights, providing potential access to additional funds or support if needed.

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4. Recommendations: Path to Financial Wellness

• Improve Cash Management:
  Increase liquidity buffers by negotiating faster debtor collections, managing payment terms with suppliers, or arranging short-term financing if necessary. Maintaining at least 3 months of operating expenses in cash is advisable to avoid liquidity "fainting spells."

• Monitor Debtor Quality and Ageing:
  Ensure receivables are collected promptly. Aging analysis and proactive credit control will reduce risk of bad debts and improve cash flow "heartbeat."

• Leverage Parent Company Support:
  Utilize the backing of KPSR Holdings Limited for any working capital needs or investment opportunities. This parental "immune system" can bolster financial strength during lean periods.

• Plan for Asset Turnover:
  The sharp drop in stock suggests real estate sales or disposals. Continue to monitor asset turnover rates and profitability on these transactions to ensure sustainable cash inflows.

• Maintain Financial Reporting Discipline:
  Continue timely filing and accurate reporting to maintain transparency and stakeholder confidence. Regular internal financial reviews will help detect early symptoms of distress.

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Executive Summary

KPSR DEVELOPMENTS LIMITED shows improving financial health with positive equity and reduced liabilities, indicating recovery and strengthening solvency. However, very low cash reserves present a liquidity risk that requires immediate attention to maintain smooth operations and avoid financial distress. Leveraging strong parent company support and improving cash flow management are key steps to sustaining financial wellness.