OLD OAK W3 LIMITED

Executive Summary

OLD OAK W3 LIMITED is facing liquidity challenges and negative equity, indicating financial distress primarily due to liabilities exceeding assets and low cash reserves. Immediate actions to improve cash flow, restructure debt, and strengthen equity are critical to stabilizing the company’s financial health and ensuring future sustainability.

OLD OAK W3 LIMITED - Analysis Report

Company Number: 12755013

Analysis Date: 2025-07-20 13:30 UTC

Financial Health Assessment: OLD OAK W3 LIMITED (as of 31 July 2024)

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1. Financial Health Score: D

Explanation:
OLD OAK W3 LIMITED exhibits signs of financial distress primarily due to negative working capital, persistent negative shareholders' funds, and growing current liabilities exceeding current assets. While some assets like inventories and debtors appear substantial, the company's liabilities outstrip its liquid and short-term assets, indicating potential liquidity challenges. The score of D reflects a concerning financial condition that requires urgent attention to avoid worsening health or insolvency.

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2. Key Vital Signs

Metric	2024 (£)	Interpretation
Current Assets	3,832,649	Reasonable asset base, mainly inventories (3.6M) but low cash (1,256).
Cash and Cash Equivalents	1,256	Critically low; "heart rate" of liquidity is weak.
Debtors	197,481	Stable receivables; mostly due from related companies.
Current Liabilities	4,494,678	High short-term obligations; growing trend from prior years.
Net Current Assets (Working Capital)	-662,029	Negative; symptoms of liquidity strain and inability to meet short-term debts.
Shareholders’ Funds	-662,029	Negative equity; "immune system" compromised, reflecting accumulated losses or over-leverage.
Bank Loans & Overdrafts	2,546,329	Significant financial leverage; rising burden compared to prior years.
Related Party Payables	1,657,718	Large amounts owed to connected company, indicating internal financing reliance.

Additional Notes:

• The company has maintained the same small share capital (£200), suggesting limited equity injections over time.
• Inventories are significant and represent work in progress on building projects valued at market prices.
• The company's main business activity is development of building projects (SIC 41100), which often involves large upfront costs and receivables cycles.

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3. Diagnosis: What the Financial Data Reveals

The company is showing clear symptoms of financial distress akin to a patient with low blood pressure and weak pulse — the business is struggling with liquidity (cash flow) and has negative net working capital, meaning it does not have enough short-term assets to cover immediate debts. The negative shareholders' funds (equity) further highlight that liabilities exceed assets, indicating ongoing losses or financial strain.

The increase in current liabilities, particularly bank loans and amounts owed to related companies, resembles a patient increasingly reliant on external life support. While inventory levels have grown, this is typical for a property development business, but combined with low cash and increasing creditor pressure, it suggests the company may face difficulties meeting short-term obligations.

The related party transactions (debts owed to and from connected companies) suggest the company depends heavily on internal group financing, which may mask true liquidity issues but also pose risks if support is withdrawn.

The absence of an audit and the small company exemption might limit the depth of financial scrutiny, but the financial snapshot points to a company that needs to stabilize its operations and improve liquidity to avoid potential insolvency.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Improve Liquidity Management:
  Focus on increasing cash reserves by accelerating debtor collections and negotiating extended payment terms with creditors. Consider short-term bridging finance to ease immediate cash flow pressures.

• Review and Optimize Inventory Levels:
  Assess the valuation and turnover of property development inventories to ensure they are not overvalued and can be sold or progressed to realize cash.

• Restructure Debt:
  Engage with lenders and related parties to restructure or refinance loans, aiming to convert short-term debt into longer-term obligations to reduce immediate pressure.

• Capital Injection:
  Explore opportunities for equity investment to strengthen shareholders' funds and provide a buffer for ongoing operations.

• Close Monitoring and Reporting:
  Implement strict financial controls and regular cash flow forecasting to detect distress early and manage working capital effectively.

• Strategic Business Review:
  Evaluate project profitability and operational efficiency to identify unprofitable segments or projects that drain resources.

• Engage Professional Advisors:
  Seek advice from restructuring specialists to develop a turnaround plan, particularly if signs of insolvency risk increase.

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Medical Analogy Summary

OLD OAK W3 LIMITED is like a patient with a dangerously low blood pressure and weak pulse: it has insufficient liquid assets to meet its immediate obligations and accumulated losses weakening its financial "immune system." Without prompt intervention—improving cash flow, debt restructuring, and possibly capital infusion—the risk of financial "collapse" or insolvency grows.

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