MM PROPERTY GROUP LTD

Executive Summary

MM Property Group Ltd is currently experiencing financial strain characterized by negative working capital and net liabilities, signaling liquidity and solvency challenges. While the company's property assets provide some stability, urgent actions to improve cash flow, restructure debt, and strengthen capital are recommended to avoid worsening financial distress. Proactive management of these symptoms will be critical to restoring the company’s financial health.

MM PROPERTY GROUP LTD - Analysis Report

Company Number: 13205105

Analysis Date: 2025-07-29 15:56 UTC

Financial Health Assessment for MM PROPERTY GROUP LTD (as of 29 February 2024)

---

1. Financial Health Score: D

Explanation:
The company shows signs of financial strain with net liabilities and a negative working capital position, indicating symptoms of distress. While it is not in immediate crisis, the financial indicators suggest challenges in liquidity and solvency that require urgent management attention to restore health.

---

2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	157,026	Reasonable current assets, mostly debtors.
Cash	4,125	Very low cash reserves, potentially risky for meeting immediate obligations.
Current Liabilities	198,318	Significantly high short-term liabilities, exceeding current assets.
Net Current Assets (Working Capital)	-41,292	Negative; company may struggle to cover short-term debts, a critical warning sign.
Total Assets Less Current Liabilities	121,620	Positive but decreasing compared to prior year.
Creditors Due After One Year	126,773	Long-term debt secured against property; manageable if asset value is stable.
Net Assets (Shareholders' Funds)	-5,153	Negative equity; liabilities outweigh assets, indicating solvency issues.
Share Capital	2	Minimal capital base; limited buffer for financial shocks.

Additional Context:

• The company holds tangible fixed assets (property) valued at £162,912, stable from prior year.
• Debtors increased substantially to £152,901, suggesting large amounts receivable but potentially illiquid.
• Loans from directors increased sharply to £184,944, indicating reliance on insider funding to cover obligations.
• Negative net assets indicate the company is technically insolvent on a balance sheet basis.

---

3. Diagnosis: What the Financial Data Reveals

MM Property Group Ltd exhibits classic symptoms of financial distress primarily caused by liquidity and solvency pressures:

• Liquidity Deficiency: The negative working capital (-£41,292) and very low cash reserves (£4,125) signal that the company does not have enough liquid resources to cover its immediate debts. This "weak pulse" in cash availability could lead to difficulties in day-to-day operations.

• Solvency Concerns: Net liabilities of £5,153 show the company’s total liabilities exceed its assets. This is akin to an "imbalance in vital organs" indicating the business is undercapitalized relative to its debts.

• High Director Loans: The significant increase in loans from directors (to £184,944) suggests external financing from insiders is propping up the business, which might not be sustainable long term or attractive to external investors.

• Asset Base Stability: The fixed asset value (property) remains stable, which is a "strong bone structure" providing some comfort. However, the burden of debt secured on this asset may limit flexibility.

• Revenue and Profitability Data Missing: Lack of turnover or profit data limits full diagnosis but the balance sheet signals stress.

Overall, the financial "vital signs" point to a company under strain but still operational. Without corrective action, symptoms could worsen, leading to insolvency risk.

---

4. Recommendations: Steps to Improve Financial Wellness

1. Improve Liquidity Management:

   • Accelerate collection of debtors to convert receivables into cash.
   • Review credit terms and tighten credit control to reduce future large outstanding balances.
   • Explore short-term financing options or overdraft facilities with banks to cover working capital gaps.

2. Debt Restructuring and Capital Injection:

   • Negotiate with creditors (including directors) to restructure short-term debts, possibly extending repayment terms to ease immediate pressure.
   • Consider raising additional equity capital to strengthen the balance sheet and reduce reliance on director loans.

3. Cost Control and Profitability Focus:

   • Conduct a thorough review of operating expenses and overheads to identify cost-saving opportunities.
   • Enhance revenue streams and ensure pricing strategies cover costs and generate surplus cash flow.

4. Asset Utilization Review:

   • Evaluate property assets for potential sale or refinancing to release cash if necessary.
   • Monitor market conditions closely to ensure asset values remain stable or improve.

5. Regular Financial Monitoring:

   • Implement monthly financial reporting focusing on cash flow forecasts and working capital trends to identify issues early.
   • Engage professional advisors for ongoing financial planning and risk management.

---