PACE EXPRESS LTD

Executive Summary

Pace Express Ltd is currently in a fragile financial state characterized by a significant negative net asset position and acute liquidity challenges. The company must urgently address its cash flow issues and debt burden to avoid insolvency. Immediate restructuring and capital support are critical to stabilize and improve financial health.

PACE EXPRESS LTD - Analysis Report

Company Number: 12458590

Analysis Date: 2025-07-19 12:06 UTC

Financial Health Assessment for Pace Express Ltd (as of 29 February 2024)

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1. Financial Health Score: D

Explanation:
Pace Express Ltd exhibits significant financial distress, primarily due to a negative net asset position and substantial long-term liabilities far exceeding its assets. While the company is operational and compliant with filing deadlines, the balance sheet shows symptoms of severe financial strain. The score "D" reflects an unhealthy financial condition that requires urgent attention to prevent further deterioration.

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2. Key Vital Signs

Metric	Value (2024)	Interpretation
Fixed Assets	£21,374	Reflects investment in long-term assets; relatively low but stable.
Current Assets	£716	Very low liquid assets available for short-term obligations—critical concern for cash flow.
Current Liabilities	£174,581	Extremely high current liabilities, indicating imminent cash demands and liquidity risk.
Net Current Assets	£716 - £174,581 = -£173,865	Negative working capital, indicating inability to cover short-term debts with short-term assets.
Total Assets Less Current Liabilities	£22,090	Positive here, but overshadowed by non-current liabilities.
Non-Current Liabilities	£174,581	Heavy long-term debt burden, putting pressure on financial stability.
Net Assets (Shareholders’ Funds)	-£152,491	Negative equity indicating accumulated losses or financial obligations exceeding owned assets.
Share Capital	£1.00	Minimal capital investment, highlighting limited shareholder buffer to absorb losses.
Employee Count	4 (Average monthly)	Small workforce consistent with micro entity status; may limit operational capacity.

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3. Diagnosis: Financial Condition Overview

• Symptoms of Distress:
  The company’s balance sheet reveals a worrying "symptom": negative net assets of £152,491, suggesting the company’s liabilities outweigh its assets significantly. This is akin to a patient showing signs of organ failure—the business is struggling to maintain solvency.

• Liquidity Crisis:
  Current assets of only £716 to cover current liabilities of £174,581 is a clear symptom of liquidity distress. This "cash flow" vital sign is dangerously low, implying the company may struggle to meet immediate financial obligations without external support or asset sales.

• Leverage and Solvency Concerns:
  The large non-current liabilities reveal a heavy debt load, increasing financial risk. This long-term debt burden is like chronic high blood pressure: it strains the company’s financial health over time and could lead to collapse if untreated.

• No Audit and Micro Entity Status:
  The company benefits from micro-entity reporting exemptions, which simplifies filings but may limit transparency. No profit and loss accounts are filed publicly, so detailed profitability analysis is unavailable. However, the negative equity trend over multiple years suggests ongoing losses or write-downs.

• Ownership and Control:
  Mr. Nadeem Abbas holds full control and ownership, indicating decision-making is centralized. This can be both a strength (swift decisions) and a risk (limited oversight).

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4. Recommendations: Actions to Improve Financial Wellness

1. Immediate Cash Flow Management:

   • Prioritize increasing current assets, particularly cash or equivalents, to cover short-term liabilities.
   • Consider negotiating extended payment terms with creditors or restructuring debts to relieve immediate pressure.

2. Debt Restructuring / Refinancing:

   • Engage with lenders to explore options for refinancing or restructuring existing long-term liabilities to manageable levels.
   • Avoid additional borrowings without a clear repayment plan.

3. Capital Injection:

   • Consider raising additional equity capital if feasible, which would improve net asset position and provide a cushion against losses.
   • Alternatively, pursue external investors or strategic partners to support growth and financial stability.

4. Operational Efficiency:

   • Review cost structures and operational efficiencies to reduce expenses and improve profitability.
   • Evaluate the fleet and asset utilization given the freight transport sector to optimize revenue generation.

5. Financial Monitoring and Reporting:

   • Implement robust financial controls and regular cash flow forecasting to detect early warning signs of distress.
   • Although exempt, voluntarily preparing detailed management accounts and profit & loss statements could support better decision-making.

6. Professional Advice:

   • Engage a financial advisor or turnaround specialist to assist with restructuring plans and negotiations with creditors.

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Medical Analogy Summary

Pace Express Ltd is showing clear symptoms of financial distress—akin to a patient with dangerously low blood pressure and weak pulse. The "vital signs" reveal liquidity shock and severe negative equity, indicating a critical condition. Without immediate intervention—such as debt restructuring and cash flow stabilization—the prognosis is poor, and the risk of insolvency rises.

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