LANUKA LTD

Executive Summary

LANUKA LTD exhibits serious financial distress evidenced by negative net assets and a substantial working capital deficit, threatening its ability to meet short-term obligations. Immediate action to improve liquidity, manage debts, and enhance revenue is critical to avoid insolvency. With committed ownership and timely compliance, there is potential for financial recovery if corrective steps are taken promptly.

LANUKA LTD - Analysis Report

Company Number: 13816628

Analysis Date: 2025-07-20 18:28 UTC

Financial Health Assessment of LANUKA LTD

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1. Financial Health Score: D

Explanation:
LANUKA LTD shows clear symptoms of financial distress with negative net assets and significant current liabilities exceeding current assets. The capital structure indicates erosion of shareholder funds, creating a fragile financial position. While the company is still active with no overdue filings, urgent remedial action is needed to restore financial health.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	1,665	Minimal tangible assets, mainly computer equipment; low investment in long-term resources.
Current Assets	1,373	Primarily debtors (£1,345) and negligible cash (£28); poor liquidity cushion.
Current Liabilities	9,801	High short-term debts; significant immediate obligations to settle.
Net Current Assets	-8,428	Working capital deficit, indicating inability to cover short-term debts with short-term assets.
Net Assets (Shareholder Funds)	-6,763	Negative equity, indicating liabilities exceed assets; capital erosion evident.
Turnover & Profit Data	Not disclosed	No turnover or profit figures supplied, limiting operational performance analysis.
Director Ownership	75-100% owned by Mr. Khokhlov	Single controlling shareholder; potential for tightly controlled decision-making.

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3. Diagnosis: Symptoms Analysis

• Liquidity Weakness ("Unhealthy Cash Flow"): Cash on hand is almost non-existent (£28), and current liabilities (£9,801) far exceed current assets (£1,373), signaling an inability to meet immediate financial obligations without external funding or asset liquidation.

• Capital Erosion: The company’s net liabilities of £6,763 indicate that the business operates with negative equity, which is a critical warning sign akin to a "patient with a failing organ." This suggests accumulated losses or unaddressed debts have depleted shareholder value.

• Asset Base: The tangible fixed assets are minimal and concentrated in computer equipment, which depreciates relatively quickly. This points to a business model likely focused on service provision rather than asset-heavy operations.

• Operational Uncertainty: Absence of reported turnover and profit figures in the accounts restricts a clear view of operational performance. However, the financial distress implies operating losses or minimal revenue generation.

• Control and Governance: The company is fully owned and controlled by one director, Mr. Khokhlov, which may facilitate swift decisions but also concentrates risk. Lack of additional directors or officers could limit governance robustness.

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4. Prognosis: Future Financial Outlook

Without intervention, the company risks insolvency due to ongoing working capital deficits and negative net worth. However, as an active entity with timely filings and a single committed shareholder, there is potential for recovery. The prognosis depends heavily on:

• Improving cash flow through increased revenue or capital injection.
• Managing or restructuring current liabilities to reduce short-term pressure.
• Enhancing operational efficiency to move towards profitability.

Failure to address these symptoms may result in administration or liquidation, akin to a patient whose condition worsens without treatment.

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5. Recommendations: Specific Actions to Improve Financial Wellness

• Immediate Cash Flow Management: Secure additional working capital through shareholder loans, external financing, or asset sales to cover current liabilities and avoid payment defaults.

• Revenue Growth Strategy: Focus on ramping up sales in core consultancy and IT services (SIC codes 70229, 62020, 62012) to generate sustainable cash inflows.

• Cost Control and Expense Review: Scrutinize operational expenses and reduce non-essential costs to conserve cash.

• Debt Restructuring: Negotiate with creditors to extend payment terms or reduce liabilities, alleviating short-term financial stress.

• Governance Enhancement: Consider appointing an additional director or financial advisor to strengthen oversight and financial discipline.

• Regular Financial Monitoring: Implement monthly cash flow forecasting and budgeting to detect and address financial issues proactively.

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