LMS VENTURES LTD

Executive Summary

LMS Ventures Ltd’s financial health has deteriorated sharply over the last year, driven by the complete disposal of its core property asset and a collapse in liquidity. The company’s net assets have nearly vanished, signaling serious financial distress. Urgent strategic and financial restructuring is recommended to restore operational viability and prevent insolvency risk.

LMS VENTURES LTD - Analysis Report

Company Number: 13293675

Analysis Date: 2025-07-29 15:06 UTC

Financial Health Assessment for LMS VENTURES LTD

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1. Financial Health Score: D (Poor)

Explanation:
LMS Ventures Ltd shows significant signs of financial distress, primarily due to the complete disposal of its fixed assets (property) by the end of the latest financial year and a drastic reduction in current assets and cash. The company’s net assets have plummeted from £25,827 in 2023 to just £2 in 2024, indicating a near collapse in financial strength. While the company remains active and not in liquidation, the financial data exhibits symptoms of severe strain, warranting urgent attention.

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2. Key Vital Signs

Metric	2024 Value	2023 Value	Interpretation
Fixed Assets (Property)	£0	£495,953	Complete disposal of property—a major asset loss.
Current Assets (Cash + Debtors)	£2	£15,232	Sharp decline in liquidity; almost no cash or receivables.
Current Liabilities	£0	£2,928	Reduced short-term debts, possibly due to asset disposal.
Long-term Liabilities	£0	£482,430	Long-term debt fully repaid or written off by 2024.
Net Assets	£2	£25,827	Drastic diminution in net worth; company is nearly insolvent.
Shareholders' Funds	£2	£25,827	Equity wiped out almost entirely.
Share Capital	£2	£2	Nominal share capital remains unchanged.

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3. Diagnosis: What the Financial Data Reveals

• Asset Disposal "Symptoms":
  The total disappearance of the tangible fixed asset (the property) is a critical event—akin to losing a vital organ. Since the company’s core business involves real estate letting and sales (SIC 68209 and 68100), this disposal represents a major disruption to its business model and income generation capability.

• Liquidity Collapse:
  Cash on hand has reduced from over £7,000 to a mere £2, and debtors vanished from £8,000 to zero. This indicates that the company now has almost no working capital to meet operational expenses, which is a serious "cash flow illness."

• Debt Extinguished but at What Cost?
  Previously, the company had long-term liabilities over £482k, likely related to the property purchase. These liabilities disappeared by 2024, implying the debt was either fully repaid or discharged through sale or restructuring. The price of this "cure" appears to be the loss of fixed assets and net worth.

• Equity Near Collapse:
  Shareholders’ funds have nearly vanished, indicating that the company’s residual value after liabilities is negligible—akin to a patient with severely weakened immune defenses.

• Operational Viability Concerns:
  With no fixed assets and almost no current assets, the firm’s ability to generate revenue from property letting or sales is severely impaired. The lack of income statement data (not filed) also limits insight into profitability, but the balance sheet signals distress.

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4. Recommendations: Steps to Restore Financial Wellness

1. Assess Business Model and Strategy

   • Conduct a strategic review to determine the company's future direction without fixed property assets.
   • Consider whether the company intends to acquire new properties, pivot business activities, or wind down operations.

2. Restore Liquidity

   • Seek immediate working capital infusion through shareholder loans, equity injection, or external financing to avoid operational paralysis.
   • Explore short-term credit facilities or overdrafts to support day-to-day cash flow.

3. Financial Restructuring

   • Engage with financial advisors to explore restructuring options if debts are outstanding or if there are contingent liabilities.
   • Ensure all creditors are aware of the company's position to prevent unexpected enforcement actions.

4. Improve Financial Reporting Transparency

   • File complete accounts including profit and loss statements to provide a full picture of financial health.
   • Establish regular financial monitoring with key performance indicators to detect early signs of distress.

5. Enhance Governance and Risk Management

   • Directors, including those with significant control, should review governance policies to manage financial risks prudently.
   • Consider appointing external consultants or accountants to support financial planning.

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Summary with Medical Analogy

LMS Ventures Ltd is currently experiencing a critical financial condition reminiscent of a patient who has lost a vital organ (the core property asset) and is running dangerously low on vital fluids (cash and working capital). The near disappearance of net assets signals systemic financial failure. Immediate intervention through liquidity restoration and strategic realignment is essential to prevent the company from entering insolvency.

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