MOJO PROPCO LIMITED

Executive Summary

MOJO PROPCO LIMITED is currently facing financial stress characterized by low liquidity and negative equity, despite holding valuable property assets. The company's survival hinges on director support and effective debt management. Immediate steps to improve cash flow and restructure debt are essential to restore financial health and prevent insolvency risks.

MOJO PROPCO LIMITED - Analysis Report

Company Number: 13880052

Analysis Date: 2025-07-29 14:43 UTC

Financial Health Assessment for MOJO PROPCO LIMITED

---

1. Financial Health Score: D

Explanation:
MOJO PROPCO LIMITED shows concerning signs of financial stress. Despite owning investment property valued at approximately £214,795, the company has persistent net current liabilities and negative shareholders’ funds for the last three years. The liquidity position is weak, with cash balances insufficient to cover short-term debts, and the company carries significant long-term loans. The going concern is currently maintained by director support, but the financial structure is fragile, warranting a cautious outlook.

---

2. Key Vital Signs

Metric	Value (2024)	Interpretation
Cash at Bank	£5,790	Very low cash reserves, indicating limited liquid resources to manage day-to-day operations.
Current Liabilities	£127,961	High short-term obligations that exceed current assets, causing working capital deficit.
Net Current Assets	-£97,309	Negative working capital, a symptom of liquidity strain; company may struggle to meet short-term debts.
Total Assets Less Current Liabilities	£117,486	Positive due to investment property, indicating asset backing beyond immediate liabilities.
Net Assets (Shareholders’ Funds)	-£10,475	Negative equity signals accumulated losses or liabilities exceeding assets, indicating financial distress.
Long-term Loans	£127,961	Significant debt burden secured against assets, possibly increasing financial risk.

---

3. Diagnosis: Financial Condition Overview

MOJO PROPCO LIMITED’s financial "vital signs" reveal symptoms of distress primarily related to liquidity and solvency challenges:

• Liquidity (Cash flow): The company holds minimal cash (£5,790) against current liabilities exceeding £127,000, resulting in negative net current assets. This is akin to a patient with a weak pulse—limited immediate resources to cover urgent obligations.

• Solvency (Balance Sheet Strength): Despite owning an investment property valued at £214,795, the company’s overall net assets are negative (£-10,475), reflecting debts and liabilities eclipsing equity. This indicates a fragile capital structure and potentially accumulated losses.

• Debt Burden: The company has long-term loans of £127,961 secured against its property assets. While asset-backed loans may provide some security, the company’s ability to service this debt depends on cash flow generation, which currently appears constrained.

• Going Concern: Directors have deferred loan repayments and agreed to support the company, which is critical to its survival. This intervention is like an external life support system, indicating the company cannot sustain itself independently at present.

• Financial Trends: Over the past two years, net current liabilities have improved but remain negative, and net assets have slightly improved but remain negative. This shows some stabilization but no substantive recovery.

In medical analogy, the company’s “heart” (cash flow) is weak, and its “immune system” (equity base) is compromised. Without intervention, the risk of financial “collapse” (insolvency) remains elevated.

---

4. Recommendations: Path to Improved Financial Wellness

Immediate Actions:

• Improve Liquidity Management:
  Increase cash reserves by accelerating receivables collection or restructuring payables. Consider short-term financing options if necessary to maintain healthy “blood flow” of cash.

• Debt Restructuring:
  Negotiate with lenders to restructure long-term loans, possibly extending repayment terms or reducing interest costs, to ease financial strain.

• Director Loan Accounts:
  Directors should consider formalising further support or converting loans into equity if feasible to strengthen the capital base.

Medium to Long-Term Strategies:

• Asset Utilisation:
  Explore opportunities to generate revenue from the investment property (e.g., leasing) to create steady cash inflows.

• Cost Control:
  Monitor and reduce overheads and non-essential expenditures to conserve cash.

• Financial Monitoring:
  Implement robust budgeting and cash flow forecasting to detect and manage financial “symptoms” early.

• Professional Advice:
  Engage financial advisors to evaluate restructuring options and ensure compliance with legal and tax requirements.

If these actions are not taken, the company risks “financial illness” progressing to “critical condition,” potentially leading to insolvency proceedings.

---