Company Number: 13609125

Analysis Date: 2025-07-29 16:14 UTC

Financial Health Assessment of NLIGHTEN BIRMINGHAM LIMITED

---

1. Financial Health Score: D

Explanation:
NLIGHTEN BIRMINGHAM LIMITED exhibits concerning signs of financial distress primarily due to net liabilities on the balance sheet, negative retained earnings, and working capital deficits. While the company holds substantial fixed assets, its current liabilities exceed current assets significantly, creating liquidity pressures. The ongoing support from the parent company and no overdue filings are positive, but the financial "symptoms" suggest the company is currently in a fragile state.

---

2. Key Vital Signs

Metric	Value (Year ended 28 Feb 2023)	Interpretation
Total Fixed Assets	£10,794,699	Strong asset base, mainly property; a positive "organ structure."
Current Assets	£903,923	Cash, debtors, and prepayments; relatively small vs liabilities.
Current Liabilities	£1,795,022	Creditors and short-term debt; greater than current assets = stress.
Net Current Assets (Working Capital)	-£891,099	Negative working capital: symptom of liquidity strain.
Long-Term Liabilities	£10,760,000	Significant debt on the books; major "chronic condition."
Net Liabilities (Equity)	-£856,400	Negative shareholder funds indicate insolvency on a balance sheet basis.
Profit & Loss Reserve	-£856,501	Accumulated losses; ongoing financial "illness."
Share Capital	£101	Nominal capital; minimal buffer.
Number of Employees	10	Small workforce; manageable overhead.
Parent Company Control	Owns 75-100%	Critical lifeline; parent company support indicated.

---

3. Diagnosis

NLIGHTEN BIRMINGHAM LIMITED carries a heavy burden of liabilities that currently exceed its assets, evidenced by net liabilities of approximately £856k. The balance sheet reveals a "symptom of distress" with negative working capital, meaning the company may struggle to pay its short-term obligations without external support.

The company’s tangible fixed assets—mainly buildings—are substantial and likely underpin its business operations, but these assets are illiquid and cannot easily be converted to cash to relieve immediate pressures. The negative retained earnings signify that the company has been incurring losses since inception or through recent years, which is a warning sign akin to chronic illness in financial terms.

However, directors’ notes indicate the company is a subsidiary with loans and working capital support provided by the parent company. The directors have concluded the company is a going concern, relying on continued funding injections. This "external life support" is vital for survival but also underscores the precarious financial health.

The company operates in real estate letting and computer facilities management, sectors that may involve high capital expenditure, explaining the high fixed assets and debt. However, the mismatch between current liabilities and current assets highlights liquidity risks.

---

4. Recommendations

To improve its financial wellness—like a patient needing treatment to recover—NLIGHTEN BIRMINGHAM LIMITED should consider the following:

• Strengthen Liquidity: Develop a plan to improve working capital, possibly by accelerating debtor collections, renegotiating payment terms with creditors, or converting some fixed assets into cash if feasible.

• Reduce Debt Burden: Work with the parent company to restructure or reduce long-term liabilities to improve net asset position and reduce financing costs.

• Improve Profitability: Evaluate operational efficiency and cost control to address the loss-making trend. Investigate revenue enhancement opportunities in core activities (real estate letting and IT management).

• Regular Financial Monitoring: Implement tighter financial controls and forecasting to detect early warning signs and avoid liquidity crises.

• Consider Capital Injection: If losses persist, an equity injection from the parent or new investors may be necessary to restore shareholder funds and confidence.

• Transparency and Communication: Maintain clear communication with creditors and stakeholders about the company’s financial status and plans to navigate recovery.

---

Summary

NLIGHTEN BIRMINGHAM LIMITED’s financial health is currently weak, with net liabilities and liquidity pressures posing significant risks. The company depends on its parent for financial support, which acts as critical "life support." While tangible assets provide a solid base, urgent action to improve liquidity, reduce debt, and restore profitability is needed to avoid further deterioration.

---