Company Number: 13020115

Analysis Date: 2025-07-20 17:38 UTC

Financial Health Assessment of OHMS HOUSE LIMITED

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1. Financial Health Score: D

Explanation:
The company exhibits several worrying signs akin to a patient with chronic but non-critical illness; it is not yet terminal but shows symptoms that, if untreated, could worsen. The consistent negative net assets (shareholders’ funds) and persistent net current liabilities indicate financial distress. The company’s gearing is high, with substantial long-term debt relative to equity, and working capital is negative, suggesting liquidity challenges.

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2. Key Vital Signs (Critical Metrics and Interpretation)

Metric	Value (2023)	Interpretation
Net Assets (Shareholders’ Funds)	£-19,944	Negative net worth indicates liabilities exceed assets, a symptom of financial strain.
Net Current Assets (Working Capital)	£-338,712	Negative working capital signals liquidity problems; unable to cover short-term debts from current assets.
Cash Available	£2,124	Very low cash on hand, insufficient buffer for operating expenses or unexpected outflows.
Current Liabilities	£340,836	High short-term debt obligations pose immediate repayment pressure.
Non-current Liabilities (Bank Loans)	£729,882	Significant long-term debt burden; akin to a chronic condition that requires management.
Fixed Assets (Tangible)	£1,048,650	Substantial asset base in property, likely core to business operations and potential collateral.
Profit and Loss Account (Retained Earnings)	£-19,945	Accumulated losses indicate ongoing operational challenges or startup phase losses.
Employee Count	0	No employees; possibly a holding or investment entity with minimal operations.

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3. Diagnosis: What the Financial Data Reveals About Business Health

OHMS HOUSE LIMITED is currently in a precarious financial state, exhibiting symptoms of "financial distress." Despite owning significant tangible fixed assets (property valued at over £1 million), the company’s capital structure is heavily leveraged with over £1 million in combined liabilities (£340k short-term, £730k long-term). The negative net asset position is a critical red flag—it means the company owes more than it owns.

The negative working capital (-£338k) reflects an inability to meet immediate liabilities from short-term assets, a liquidity problem that could impair day-to-day operations or creditor confidence. The low cash balance (£2,124) further exacerbates this issue, suggesting cash flow constraints.

The company has no employees, indicating it may function as a property holding or investment entity rather than an active trading business. The director’s occupation as a property developer aligns with this.

The financials do not show turnover or profit figures, but the accumulated losses suggest the company has yet to generate profitability or has ongoing expenses exceeding income. The company benefits from exemption from audit due to its size but should remain vigilant in managing cash flow and debt levels.

Overall, the company is "surviving but fragile," reliant on its asset base to cover debts but at risk if liabilities become due or assets cannot be liquidated promptly. The balance sheet looks like a patient with chronic illness needing intervention to avoid further deterioration.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Improve Liquidity and Cash Flow Management:

   • Explore ways to increase cash reserves, possibly through short-term financing or asset sales.
   • Negotiate extended payment terms with creditors or restructure short-term debts to ease pressure on working capital.

2. Debt Restructuring:

   • Consider refinancing the £730k bank loan to more manageable terms or exploring equity injection to reduce leverage.
   • Engage with lenders to avoid default risks, especially given negative net assets.

3. Asset Utilization:

   • Assess the fixed asset portfolio; if properties are non-income generating, consider sale or leaseback arrangements to raise funds.

4. Operational Review:

   • If the company intends to trade actively, hiring or engaging operational staff and generating revenue streams is critical.
   • If holding assets only, ensure the business model supports debt servicing and covers overheads.

5. Regular Financial Monitoring and Forecasting:

   • Implement monthly cash flow forecasts and balance sheet reviews to detect early signs of distress.
   • Prepare for potential downturns by maintaining a financial buffer.

6. Professional Advice:

   • Seek advice from insolvency practitioners or financial advisors to explore turnaround options before the situation worsens.

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