NEST CONTRACTS LTD

Executive Summary

NEST CONTRACTS LTD currently exhibits financial distress symptoms including negative working capital and shareholders’ funds, indicating liquidity and solvency challenges typical of a young micro company still in development. Immediate actions to strengthen cash flow, capital injection, and operational clarity are critical to reversing its fragile financial condition and improving future viability.

NEST CONTRACTS LTD - Analysis Report

Company Number: SC733007

Analysis Date: 2025-07-29 12:43 UTC

Financial Health Assessment: NEST CONTRACTS LTD

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1. Financial Health Score: D

Explanation:
The company shows persistent negative shareholders' funds and a working capital deficit, which are key "symptoms" of financial distress. Although it is a micro entity with limited operational scale, these vital signs indicate that the business is currently undercapitalised and may face liquidity challenges. The company is not in immediate danger of insolvency but requires urgent financial management attention to improve its balance sheet health.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	12,591	Cash and short-term assets have improved but remain low in absolute terms.
Current Liabilities	25,471	Current liabilities have more than doubled, indicating rising short-term obligations.
Net Current Assets (Working Capital)	-12,880	Negative working capital ("cash flow symptom of distress"), meaning short-term debts exceed assets.
Shareholders' Funds (Equity)	-13,630	Increasing negative equity signals accumulated losses and undercapitalisation ("balance sheet illness").
Average Number of Employees	0	No employees, which suggests limited operational activity or a holding structure.

Additional Observations:

• The company changed its name from MELROSE PROPERTY GROUP LTD to NEST CONTRACTS LTD in May 2025, possibly reflecting a strategic shift or restructuring effort.
• The only significant control is held by Mr Patrick Faichney, who owns 75-100% shares and voting rights, indicating concentrated ownership and decision-making power.
• The business operates in the "Residents property management" sector (SIC 98000), a field often requiring steady cash flow and operational efficiency.

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3. Diagnosis: What the Financial Data Reveals

The financial "vital signs" resemble a patient with chronic financial stress:

• Negative Working Capital: The company owes more in short-term liabilities than it holds in current assets, indicating a liquidity crunch. This is akin to a patient with insufficient blood flow to vital organs — the business may struggle to meet immediate financial obligations.
• Negative Shareholders' Funds: Equity is deeply negative and worsening year-on-year, showing cumulative losses or liabilities exceeding assets. This condition reflects "organ failure" in the financial structure, where the company lacks sufficient capital buffer.
• No Employees: This could mean the company is not yet operationally active or is a shell entity, which raises questions about its ability to generate revenue and improve its financial health.
• Rising Liabilities: Creditors and deferred income values have increased significantly, which could be short-term borrowing or unpaid bills, augmenting financial strain.

Overall, the company is in a fragile financial state, with symptoms that could lead to insolvency if not addressed. However, as it is a young micro entity (incorporated 2022) and not currently overdue on statutory filings or in liquidation, there remains potential for recovery.

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4. Recommendations: Steps to Improve Financial Wellness

1. Strengthen Liquidity:

   • Inject additional capital or secure short-term financing to cover current liabilities and restore positive working capital.
   • Prioritise collecting any outstanding receivables and managing payables to smooth cash flow.

2. Review Operational Model:

   • If the company is dormant or inactive, clarify its business plan and consider operationalising activities to generate revenue.
   • If still in start-up phase, focus on building a sustainable revenue stream aligned with property management services.

3. Cost Control:

   • Maintain low overheads until cash flow stabilises; consider outsourcing or automation to reduce employee-related costs if hiring is planned.

4. Financial Monitoring:

   • Implement monthly cash flow forecasts and management accounts to detect early warning signs.
   • Engage with financial advisors to restructure debts or negotiate terms with creditors.

5. Governance and Strategy:

   • Concentrated ownership offers quick decision-making but consider adding financial expertise to the board or advisory team.
   • Transparent reporting and timely statutory filings are essential to maintain stakeholder confidence.

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