LMPD PROPERTIES LTD

Executive Summary

LMPD PROPERTIES LTD, a micro-property business, holds significant fixed assets but faces liquidity challenges marked by negative working capital and low cash reserves. While profitable, the thin margin and high current liabilities signal financial fragility. Immediate focus on improving liquidity and operational profitability is essential to strengthen the company's financial health and ensure sustainable growth.

LMPD PROPERTIES LTD - Analysis Report

Company Number: 13237628

Analysis Date: 2025-07-29 14:18 UTC

Financial Health Assessment – LMPD PROPERTIES LTD (Year ended 31 March 2024)

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1. Financial Health Score: C

Explanation:
The company shows moderate financial health with positive net assets but significant working capital concerns indicated by negative net current assets. The business has a small but positive profit, which is a good sign. However, the heavy current liabilities and low liquidity create symptoms of financial stress that require immediate attention to avoid liquidity crises.

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2. Key Vital Signs

Metric	Value (2024)	Interpretation
Turnover	£8,868	Very low annual revenue, typical of a micro-entity, suggesting a small scale of operations.
Profit	£2,192	Positive profit indicates the business is generating surplus income, but the margin is thin.
Fixed Assets	£114,917	Significant investment in property assets, reflecting the company's real estate activity.
Current Assets	£16,328	Low liquid assets available to cover short-term obligations, a concern for cash flow health.
Current Liabilities	£122,008	High short-term debts creating a liquidity strain; liabilities exceed current assets by ~7.5x.
Net Current Assets (Working Capital)	-£105,680	Negative working capital indicates potential difficulty in meeting short-term obligations.
Shareholders’ Funds (Net Assets)	£9,137	Positive but very low equity base, indicating minimal buffer against financial shocks.
Cash (2023 figure)	£13,085	Low cash reserves to manage day-to-day expenses, possibly insufficient to cover liabilities.

Vital Sign Interpretation:

• Healthy cash flow is absent given the low current assets and high current liabilities.
• The large fixed asset base (likely property) is illiquid, meaning the company cannot rely on it for quick cash needs.
• Persistent negative working capital is a symptom of distress, indicating the company may struggle to pay bills on time or may rely on external financing.
• The small profit margin suggests the company barely covers its operational costs.

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3. Diagnosis

LMPD PROPERTIES LTD presents as a micro-entity with a property-focused business model, owning significant fixed assets but facing liquidity challenges. The negative working capital is the primary symptom of financial strain, showing that current liabilities vastly exceed current assets. This suggests the company may be relying on longer-term financing or delaying payments to suppliers.

The thin profit margin is a positive sign but insufficient to significantly improve liquidity. The low equity base means the company has limited financial cushioning. Given the company’s recent incorporation in 2021 and gradual growth in net assets, it appears to be in an early stage of development but should be cautious.

Overall, the financial "pulse" signals a fragile condition. The company is solvent but with strained liquidity, which poses a risk of cash flow problems if not addressed.

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4. Recommendations

1. Improve Liquidity Management

   • Focus on increasing current assets, especially cash and receivables.
   • Consider restructuring current liabilities to extend payment terms or convert short-term debt to long-term to ease immediate pressure.

2. Enhance Revenue and Profitability

   • Explore ways to increase turnover beyond the current £8,868 to create healthier operating margins and greater cash inflows.
   • Review operating costs to identify reductions without compromising business activity.

3. Capital Injection or Financing

   • Consider additional equity investment or obtaining longer-term loans to strengthen the equity base and reduce reliance on short-term creditors.
   • This will help build a financial buffer and improve working capital.

4. Asset Utilization

   • Evaluate the fixed asset portfolio for opportunities to unlock value, such as leasing, refinancing, or selling underutilized properties to generate cash.

5. Regular Financial Monitoring

   • Implement monthly cash flow forecasts and working capital reviews to promptly detect and address financial stress symptoms.

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Medical Analogy Summary

LMPD PROPERTIES LTD shows the vital signs of a stable but weak patient: solid structural assets (fixed assets) but poor blood flow (cash and liquidity). The negative working capital is like a symptom of circulatory congestion—the business struggles to get cash flowing quickly enough to meet its immediate obligations. Without intervention to improve liquidity and profitability, this condition could worsen, potentially leading to financial distress.

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