Company Number: 13266114

Analysis Date: 2025-07-20 17:48 UTC

Financial Health Assessment of OLEON PROPERTIES LTD as at 31 March 2024

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1. Financial Health Score: D

Explanation:
The company exhibits significant financial strain characterized by increasing net liabilities, poor liquidity, and a heavy reliance on director loans and external financing. These symptoms point to financial distress, although the core assets appear substantial. The financial health is below average, indicating an urgent need for corrective action to avoid further deterioration.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Cash at bank	£2,075	Critically low cash reserves, insufficient for covering short-term obligations.
Current Liabilities	£168,626	High short-term debts, mostly director's loan, posing liquidity risk.
Net Current Assets (Working Capital)	-£166,551	Negative working capital; company cannot cover current liabilities with current assets, a "symptom" of liquidity distress.
Net Assets (Equity)	-£20,955	Negative net assets indicating insolvency on a balance sheet basis.
Shareholders’ Funds	-£20,956	Equity wiped out, reflecting accumulated losses and creditor dominance.
Fixed Assets (Tangible Assets)	£295,167	Strong asset base mainly in land and buildings, potential for collateral or sale.
Director's Loan (Short-term Creditor)	£167,776	Heavy reliance on unsecured director funding, no interest charged but a risk if repayment is demanded.
Bank Loans (Long-term Creditors)	£149,571	Significant external debt that may require servicing and repayment schedules.

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3. Diagnosis: Underlying Financial Condition

OLEON PROPERTIES LTD is currently in a state of financial "illness" marked by:

• Liquidity Strain: The company’s cash reserves are extremely low and cannot meet the immediate liabilities, especially the large sums owed to the director and others within one year.
• Negative Working Capital: The inability to cover short-term debts with current assets signals potential operational cash flow problems.
• Balance Sheet Insolvency: Negative net assets indicate that total liabilities exceed total assets, a critical "red flag" suggesting that the company’s financial foundation is weak.
• Heavy Debt Burden: The company depends heavily on director loans and bank loans, which may create pressure due to repayment obligations, even if the director loan is interest-free.
• Asset Rich but Cash Poor: The company owns substantial fixed assets (property, plant, and equipment), which could be leveraged to improve liquidity, but these are illiquid and may take time to convert to cash.

The company’s financial reports reflect a start-up or early-stage business that has accumulated losses and is struggling to generate healthy cash flows sufficient to stabilize its finances.

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4. Recommendations for Financial Wellness Improvement

To restore financial health and mitigate distress symptoms, OLEON PROPERTIES LTD should consider:

1. Improving Liquidity:

   • Accelerate collection of any receivables or income from property management/sales.
   • Reduce non-essential expenses and optimize operational cash flow.
   • Negotiate longer payment terms with creditors to ease immediate cash pressure.

2. Debt Restructuring:

   • Engage with the director and bank creditors to restructure the repayment schedule, possibly converting short-term director loans into longer-term arrangements.
   • Explore refinancing options to manage bank loans more effectively.

3. Leverage Fixed Assets:

   • Consider selling underutilized property assets or securing additional financing against these assets to raise working capital.
   • Evaluate potential for rental income or other revenue streams from owned real estate to improve cash flow.

4. Capital Injection:

   • Seek additional equity investment or shareholder funding to restore positive net assets and build a financial buffer.
   • Alternatively, consider bringing in new partners or investors.

5. Financial Monitoring:

   • Implement robust cash flow forecasting and regular financial reviews to identify and address distress symptoms early.
   • Maintain compliance with filing deadlines to avoid legal penalties.

6. Professional Advice:

   • Consult insolvency practitioners or financial advisors to explore turnaround strategies if financial distress worsens.

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Medical Analogy Summary

The company exhibits “symptoms of financial distress” such as negative net assets (like a patient with low vital organ function), poor liquidity (like dehydration), and heavy reliance on director loans (akin to emergency life support). While the "fixed assets" represent a strong skeletal structure, the company needs a treatment plan focused on stabilizing cash flow and restructuring debt to regain financial health.

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