LIGHTPOLE LTD

Executive Summary

Lightpole Ltd is currently experiencing financial distress characterized by negative working capital and negative equity, signaling liquidity and solvency challenges. Without intervention, these symptoms may worsen, threatening the company’s viability. Immediate actions focusing on liquidity improvement, debt restructuring, and strategic cost management are essential to restore financial health.

LIGHTPOLE LTD - Analysis Report

Company Number: 14193754

Analysis Date: 2025-07-29 16:59 UTC

Financial Health Assessment for LIGHTPOLE LTD as of 30 June 2024

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1. Financial Health Score: D

Explanation:
The company is exhibiting clear symptoms of financial distress, with persistent negative net assets and negative working capital over three consecutive years. This grade reflects significant financial strain and an urgent need for remedial action to avoid further deterioration.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	251,820	Stable long-term assets; indicates investment in property or equipment.
Current Assets	26,903	Very low liquid assets; insufficient to cover short-term obligations.
Current Liabilities	194,055	High short-term debts, close to eight times current assets.
Net Current Assets	-74,677	Negative working capital; company may struggle to meet near-term liabilities ("cash flow distress").
Creditors (Long-term)	194,055	Substantial long-term debt obligations.
Net Assets (Equity)	-16,912	Negative equity indicates liabilities exceed assets; company is "underwater".
Shareholders' Funds	-16,912	Reflects accumulated losses or capital erosion.

Additional Observations:

• No material change in fixed assets or liabilities over the last 3 years.
• Current liabilities are disproportionately high relative to current assets, signaling liquidity issues.
• Negative net assets have persisted since incorporation, indicating ongoing losses or initial undercapitalization.

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3. Diagnosis: What the Financial Data Reveals About Business Health

The financial "vital signs" of Lightpole Ltd present a company suffering from chronic financial strain. The negative working capital ("symptom of distress") suggests potential difficulties in meeting short-term debts, which could lead to liquidity crises if not managed properly.

The persistent negative shareholders' equity ("diagnostic marker") indicates the company’s liabilities exceed its assets, a red flag for solvency. This situation is often a result of accumulated losses or insufficient capital injection.

The company operates in real estate activities (SIC codes 68209 and 68100), which typically require substantial capital investment and stable cash flows. However, the limited current assets indicate the company may lack adequate liquid resources to support ongoing operations or debt servicing.

The consistent figures over three years suggest stagnation rather than improvement, implying the company has not yet reversed its financial condition.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Increase Liquidity: Seek additional capital injection or restructure current liabilities to improve working capital and avoid cash flow shortages. This could involve negotiating longer payment terms or refinancing existing debts.

• Cost Management: Review and reduce operating expenses to minimize cash burn, especially given only one employee, indicating a lean operation.

• Asset Utilization: Evaluate the fixed assets for potential monetization or better utilization to generate cash inflows.

• Financial Restructuring: Engage with creditors to renegotiate debt terms, possibly converting some debt to equity to improve the balance sheet.

• Cash Flow Forecasting: Implement rigorous cash flow monitoring and forecasting to anticipate liquidity gaps and plan accordingly.

• Strategic Review: Consider if current business model and market positioning are viable, or if pivoting or additional revenue streams are necessary.

• Professional Advisory: Consult with financial and insolvency experts early to explore turnaround options before distress worsens.

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