LEHANE & MAY DEVELOPMENTS LTD

Executive Summary

LEHANE & MAY DEVELOPMENTS LTD holds significant property assets but is heavily leveraged with very limited cash and net equity, posing liquidity and solvency risks. Immediate focus on improving cash flow, reducing debt pressures, and strengthening equity is crucial to stabilize and support sustainable growth. The company is at an early stage, requiring careful financial management to avoid distress.

LEHANE & MAY DEVELOPMENTS LTD - Analysis Report

Company Number: 15076435

Analysis Date: 2025-07-20 14:57 UTC

Financial Health Assessment for LEHANE & MAY DEVELOPMENTS LTD

---

1. Financial Health Score: D

Explanation:
The company shows a fragile financial condition with a very low net asset base (£12) relative to significant liabilities (£255,826). While it possesses valuable fixed assets (property) worth £253,310, these are heavily leveraged by loans exceeding £255K. The minimal working capital and negligible cash reserves indicate limited liquidity, posing risks to operational stability.

---

2. Key Vital Signs

Metric	Value	Interpretation
Fixed Assets (Property)	£253,310	Strong asset base indicating investment in property; a vital long-term resource.
Cash at Bank	£2,694	Very low cash balance, signaling tight liquidity — like a patient with low blood volume.
Current Liabilities	£255,826	High short and long-term debts creating financial strain (potential "symptom" of distress).
Net Current Assets	£2,528	Positive but very small working capital, barely enough to cover immediate obligations.
Net Assets / Shareholders' Funds	£12	Almost zero equity, indicating the company is highly leveraged and at risk of insolvency.
Loans from Directors	£90,846	Significant related-party debt, possibly reflecting founder support but increasing risk exposure.
Bank Loans	£164,980	Substantial external debt with repayment obligations.
Employee Count	2	Micro-scale operation, consistent with a small business profile.

---

3. Diagnosis

The company is in its infancy, incorporated less than two years ago, and is engaged in property letting and management. The "vital signs" reveal a heavy reliance on debt financing, particularly bank loans and director loans, to acquire its tangible fixed assets. This is typical for property development or investment companies starting out, where capital-intensive acquisitions require borrowing.

However, the extremely low net equity (shareholders' funds) signals a precarious financial position. The company’s balance sheet resembles a patient with a strong organ (property assets) but weak circulatory system (cash and working capital). The low cash balance and minimal working capital suggest limited ability to meet short-term obligations without additional financing or income generation.

The absence of depreciation on fixed assets may indicate these are land or newly acquired property not yet depreciated, but long-term sustainability depends on generating rental income or capital gains.

No audit was required or performed, and the company is filing on a "Total Exemption Full" basis consistent with a small entity.

---

4. Recommendations

1. Improve Liquidity:

   • Increase cash reserves through effective rent collection, asset management, or additional equity injection.
   • Consider renegotiating loan terms to ease short-term repayment pressures.

2. Strengthen Equity Base:

   • Explore options for equity capital injection from shareholders or external investors to improve net asset position and reduce financial leverage.

3. Revenue Generation Focus:

   • Prioritize securing tenants or contracts to generate steady cash flow, ensuring the company can service debt and cover operating expenses.

4. Financial Monitoring:

   • Implement regular cash flow forecasting and financial planning to avoid liquidity crises.
   • Monitor debt covenants and maintain open communication with lenders.

5. Risk Management:

   • Review director loans to formalize terms and ensure clarity on repayment to mitigate potential conflicts or financial risks.

---

Medical Analogy Summary:
LEHANE & MAY DEVELOPMENTS LTD currently shows a strong "organ" in property assets but suffers from symptoms of financial distress due to low liquidity and high debt leverage. Without improving cash flow and equity, the company risks financial instability akin to a patient with a strong heart but dangerously low blood pressure.

---