NEILSON'S PROPERTY MANAGEMENT LTD

Executive Summary

NEILSON'S PROPERTY MANAGEMENT LTD exhibits significant liquidity challenges with negative working capital and substantial related-party liabilities, indicating financial fragility despite a solid asset base. Immediate focus on improving cash flow, refinancing short-term debts, and boosting equity is essential to stabilize financial health and ensure operational sustainability.

NEILSON'S PROPERTY MANAGEMENT LTD - Analysis Report

Company Number: SC707800

Analysis Date: 2025-07-29 13:46 UTC

Financial Health Assessment: NEILSON'S PROPERTY MANAGEMENT LTD

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1. Financial Health Score: D

Explanation:
The company exhibits clear symptoms of financial distress primarily due to negative working capital and a heavy creditor burden relative to current assets. While it holds fixed assets of reasonable value, the liquidity position is weak, indicating challenges in meeting short-term obligations without external support. The equity base is minimal and only marginally positive, signaling limited financial buffer. The overall financial condition is fragile and warrants immediate attention.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	82,962	Significant investment in long-term assets, possibly property holdings, matching industry activity.
Current Assets	5,532	Very low liquid resources available to cover short-term liabilities.
Current Liabilities	84,499	High short-term debts, including a large loan from a related party, creating liquidity pressure.
Net Current Assets	-78,967	Negative working capital; company cannot cover current debts with current assets, a sign of liquidity distress.
Total Assets Less Current Liabilities	3,995	Slightly positive net assets indicating minimal equity; however, this is very thin and vulnerable.
Shareholders’ Funds	3,995	Equity is positive but minimal, suggesting limited financial cushion against losses or shocks.
Share Capital	3	Nominal capital indicating micro-entity size and limited initial funding.
Average Employees	NIL	No staff employed, implying possibly a holding or investment vehicle rather than an operational business.

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3. Diagnosis

Symptoms Analysis:

• The company’s balance sheet reveals "symptoms of financial fatigue" especially in its liquidity profile. Negative net current assets indicate an inability to cover short-term liabilities with available current assets, which is akin to a patient experiencing a "cash flow deficiency" — it may struggle to pay bills on time without additional cash injections or refinancing.
• The substantial loan from a related party (over £71,000) is a dependency that could be both a lifeline and a risk factor; reliance on intra-group funding may mask underlying liquidity issues.
• Fixed assets are healthy and consistent with the company’s business of buying and selling real estate, suggesting a solid asset base but limited operational activity (no employees).
• Shareholders' funds increased from £2 to nearly £4,000, showing some capital growth but still very thin, akin to a patient with a low immunity buffer—financially vulnerable to shocks.
• The company has no overdue filings indicating management diligence in compliance, which is a positive sign.

Overall Condition:
The company is in a fragile but not critical state. The core issue is liquidity risk (negative working capital) and reliance on related-party loans. The business model may be asset-heavy but operationally light, limiting cash inflows. Without an improvement in current asset liquidity or reduction of short-term liabilities, the company risks cash flow crises.

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4. Recommendations

To restore "financial health" and improve liquidity resilience, the company should consider:

• Improve Working Capital Management:
  Explore options to increase current assets (e.g., cash reserves) or restructure current liabilities to extend payment terms, reducing immediate pressure.

• Refinance or Repay Related-Party Loan:
  Negotiate longer-term terms or convert part of the loan to equity to improve liquidity ratios and reduce short-term creditor pressure.

• Enhance Cash Flow Forecasting:
  Implement detailed cash flow planning to anticipate and manage liquidity gaps proactively, akin to monitoring vital signs regularly.

• Asset Utilization:
  Assess whether fixed assets are generating sufficient returns. If possible, consider monetizing underperforming assets to inject cash.

• Seek External Capital or Investment:
  Inject fresh equity or secure external funding to bolster shareholders’ funds and provide a financial buffer.

• Operational Review:
  Although no employees are reported, review operational plans to ensure the company can generate sustainable revenue streams.

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