ORBITAL PROJECTS 9 LIMITED

Executive Summary

ORBITAL PROJECTS 9 LIMITED is a newly incorporated small private company in the electricity production sector showing early-stage financial distress with negative working capital and shareholders’ funds. The company depends heavily on its parent for ongoing funding, and while the directors are confident of securing additional finance, current financial indicators highlight liquidity and solvency risks. Proactive funding diversification, cost control, and accelerated revenue generation are critical to improving financial health and ensuring long-term viability.

ORBITAL PROJECTS 9 LIMITED - Analysis Report

Company Number: SC765168

Analysis Date: 2025-07-29 20:54 UTC

Financial Health Assessment for ORBITAL PROJECTS 9 LIMITED as at 31 December 2023

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1. Financial Health Score: D

Explanation:
The company is in the early stages of its lifecycle, having been incorporated in April 2023. Its balance sheet shows a net current liability position with negative shareholders’ funds, indicating that liabilities exceed assets. There is also a material uncertainty about its ability to continue as a going concern without ongoing financial support from its parent company. While this is not unusual for a start-up or technology development company, it signals significant financial vulnerability at present.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Debtors	1	Minimal receivables, indicating negligible cash inflows from customers or related parties.
Current Liabilities	19,133	Short-term debts exceeding current assets, indicating immediate cash flow pressure.
Net Current Assets	-19,132	Negative working capital, a symptom of liquidity stress and inability to cover short-term debts.
Shareholders’ Funds	-19,133	Negative equity, showing accumulated losses exceeding capital invested; a sign of distress.
Going Concern Note	Material uncertainty	Directors rely on parent company funding; ongoing support critical for survival.
Audit Opinion	Unqualified with emphasis on going concern	Auditor agrees with directors but flags risk, akin to “watchful monitoring” in medical terms.

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3. Diagnosis: What the Financial Data Reveals

• Liquidity Stress (Symptoms of Distress): The company’s current liabilities exceed its current assets by £19,132, an immediate liquidity concern akin to a patient with low blood pressure struggling to maintain vital organ function. This indicates the company may face challenges in meeting short-term obligations without external support.

• Negative Equity (Underlying Condition): The shareholders’ deficit of £19,133 suggests the company has consumed more resources than it has generated, common in early-stage ventures but a warning sign for financial health. This is like a patient with a weakened immune system still fighting off initial infections.

• Dependence on Parent Company (Treatment Dependency): The company’s survival is heavily dependent on financial support from its parent, Orbital Marine Power Limited. The going concern note describes this reliance as a “material uncertainty.” Without this support, the company could face insolvency, similar to a patient reliant on a life-support machine.

• No Revenue or Operating Cash Flows Yet: Minimal debtors and no reported sales or profit indicate the company is still in development or pre-revenue stage, common in technology development companies but necessitating continuous funding to stay “healthy.”

• Audit and Governance: The clean audit opinion with an emphasis on going concern is analogous to a doctor confirming current treatment is appropriate but alerting to future risks if conditions worsen.

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4. Recommendations: Steps to Improve Financial Wellness

1. Strengthen Liquidity Position:
   Seek additional short-term funding or working capital facilities to cover immediate liabilities and avoid cash flow crises. This could be through further equity injections by the parent company or short-term loans.

2. Secure and Diversify Funding Sources:
   Reduce dependence on the parent company by actively pursuing grant funding, project financing, and external investors as outlined in the directors’ report. Achieving diversified funding is like strengthening a patient’s immune system to stand independently.

3. Accelerate Revenue Generation:
   Transition from development to commercial operations by advancing project pipelines, securing contracts, and generating sales. Early revenue will improve cash flow and reduce negative equity.

4. Regular Financial Monitoring:
   Implement frequent cash flow forecasting and scenario analysis to anticipate liquidity needs and avoid surprises. Like regular health check-ups, this will help detect and address problems early.

5. Cost Management:
   Maintain tight control over overheads and discretionary spending to prolong the cash runway. In medical analogy, this is akin to managing patient nutrition and activity levels to optimize recovery chances.

6. Transparent Stakeholder Communication:
   Keep shareholders, creditors, and funders informed about progress and funding needs. Transparency builds trust and support, much like clear communication between doctor and patient.

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Executive Summary