MCP PROPERTIES (BRISTOL) LTD

Executive Summary

MCP Properties (Bristol) Ltd currently faces significant financial challenges, notably negative working capital and shareholders' funds, largely driven by high short-term liabilities and reliance on related party loans. While the company holds valuable investment property assets, urgent action is needed to improve liquidity and capital structure to avoid further distress. With careful management and strategic funding, the company can stabilize its financial health and build a sustainable foundation for growth.

MCP PROPERTIES (BRISTOL) LTD - Analysis Report

Company Number: 14721946

Analysis Date: 2025-07-20 15:49 UTC

Financial Health Assessment: MCP Properties (Bristol) Ltd

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1. Financial Health Score: D

Explanation:
MCP Properties (Bristol) Ltd is a newly incorporated private limited company focused on property letting. Its financial statements for the period ending March 31, 2024, reveal significant liquidity challenges, evidenced by negative net current assets and shareholders' funds. The company shows a precarious balance sheet position, with liabilities exceeding assets, which points to financial distress symptoms. While this is not uncommon for a startup, the current financials suggest urgent attention is required to improve stability.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets (Investment Property)	563,242	Strong asset base in property, likely the company’s core business asset.
Current Assets	73,858	Low liquidity buffer; includes cash (£14,938) and debtors (£58,920).
Current Liabilities	705,902	Very high short-term obligations, mostly amounts owed to related parties.
Net Current Assets	-632,044	Negative working capital; company cannot cover short-term debts with current assets.
Total Assets Less Current Liabilities	-68,802	Overall net asset deficit, indicating insolvency on a balance sheet basis.
Shareholders’ Funds	-68,802	Negative equity means accumulated losses exceed capital invested.
Director Loan Balance	58,920	Director advanced funds, indicating reliance on insider funding.
Related Party Loan	704,231	Significant loan from a related company, no interest charged, short-term creditor.

Interpretation of Vital Signs:

• The fixed assets are substantial, representing owned or leased investment property, a valuable long-term resource.
• However, the severe negative net current assets reflect a liquidity crisis: the company’s short-term liabilities far exceed its current assets, signaling "symptoms of distress."
• Negative shareholders’ funds indicate the company is "under the weather" financially, with liabilities outstripping assets, a critical warning sign.
• The large loan from a related party (MarthaJackson Ltd) underscores dependence on external funding within the group, which may not be sustainable long-term without a clear repayment or restructuring plan.

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3. Diagnosis

MCP Properties (Bristol) Ltd shows early-stage financial strain typical of a company in its infancy but with some worrying signs:

• Liquidity Deficiency: The company cannot meet its short-term obligations from its available liquid assets. This is the primary "symptom" of financial distress and could impede ongoing operations unless resolved promptly.
• Negative Net Assets: The overall balance sheet shows a deficit, which may raise concerns about solvency under accounting definitions. While this does not automatically mean insolvency legally, it does flag potential going concern issues.
• Heavy Related Party Exposure: The reliance on a large, interest-free related party loan within one year to cover liabilities suggests vulnerability to changes in lender support or terms. This "insider financing" may be a temporary lifeline but is not a substitute for sustainable cash flow generation.
• No Employees and Small Scale: With no recorded staff and limited operations, cash flow generation may be minimal presently, increasing dependency on external funding or additional equity injections.

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4. Recommendations

To improve the financial wellness and stability of MCP Properties (Bristol) Ltd, the following actions are recommended:

1. Improve Liquidity Management:

   • Seek to convert some fixed assets (if feasible) or negotiate longer terms on current liabilities to ease short-term cash pressures.
   • Explore additional equity funding or more structured financing arrangements to reduce reliance on short-term related party loans.

2. Develop Cash Flow Forecasts:

   • Prepare detailed cash flow projections to identify funding gaps early and plan accordingly.
   • Monitor debtor collections closely to accelerate cash inflows.

3. Strengthen Capital Structure:

   • Consider recapitalisation options to restore positive shareholders’ funds and improve the balance sheet health.
   • Engage with related parties to formalise loan terms, including interest and repayment schedules, to improve transparency and sustainability.

4. Operational Strategy:

   • Increase revenue generation efforts (e.g., leasing property effectively) to build healthy operating cash flows.
   • Evaluate cost controls to limit cash burn.

5. Regular Financial Review:

   • Implement monthly financial reviews to track progress and respond swiftly to any deterioration.
   • Ensure compliance with filing deadlines to maintain good standing and avoid penalties.

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