PAVILION LANDMARK LIMITED

Executive Summary

Pavilion Landmark Limited is currently facing financial distress, with negative working capital and a shareholders’ deficit indicating insolvency. Immediate focus on improving liquidity, securing capital injections, and operational monitoring is essential to restore financial health. Without intervention, the company risks worsening financial instability in a capital-intensive industry.

PAVILION LANDMARK LIMITED - Analysis Report

Company Number: 14562761

Analysis Date: 2025-07-29 18:26 UTC

Financial Health Assessment for Pavilion Landmark Limited

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1. Financial Health Score: D (Poor)

Explanation:
Pavilion Landmark Limited is currently showing clear symptoms of financial distress. The company has net current liabilities of £32,012 and a shareholders' deficit of the same amount, indicating it is insolvent on a balance sheet basis. The very limited cash balance (£325) further aggravates liquidity concerns. While the company is still active and recently incorporated, these financials point to a fragile and unstable financial condition requiring urgent attention.

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2. Key Vital Signs

Metric	Value	Interpretation
Current Assets	£23,738	Mainly debtors (£23,413), very low cash (£325); limited liquid resources.
Current Liabilities	£55,750	High short-term obligations, including £50,000 owed to group companies, stressing liquidity.
Net Current Assets	-£32,012	Negative working capital; company cannot meet short-term debts from current assets.
Net Assets (Equity)	-£32,012	Negative net assets indicate insolvency on a balance sheet level.
Shareholders’ Funds	-£32,112	Deficit in equity reflects accumulated losses or undercapitalization.
Cash	£325	Critically low cash reserves; insufficient for daily operational needs or emergencies.
Account Category	Total Exemption Full	Small company with exemption from audit, but financials still show weakness.
Industry SIC Code	41100 (Development of building projects)	Capital-intensive sector, requiring strong liquidity and asset backing.

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3. Diagnosis

Pavilion Landmark Limited is in the early stages of its business life, incorporated in December 2022. Despite its youth, the company is exhibiting symptoms of financial distress:

• Negative Working Capital: With current liabilities exceeding current assets by £32,012, the company is unable to cover its immediate debts with its liquid assets. This is a critical red flag often described as “cash flow distress” in medical terms.

• Balance Sheet Insolvency: The negative net assets and shareholders’ deficit point to the company having more liabilities than assets, a condition akin to a patient showing systemic failure — an unsustainable financial position without intervention.

• Low Cash Reserves: Having only £325 in cash is like a patient with minimal blood flow; the company lacks the liquidity to meet urgent payments or invest in growth.

• High Group Debt: £50,000 owed to group undertakings suggests intra-group financing, which may provide temporary relief but also indicates reliance on related parties for funding.

• No Profit & Loss Statement Available: The absence of a reported profit and loss account means we cannot assess operational performance or profitability trends, which limits diagnostic clarity.

• Industry Risk: Operating in building project development, a capital-intensive and cyclical sector, the company needs robust financial health to weather project delays or market downturns.

In sum, the company is “unwell,” showing signs of financial strain that could worsen if cash inflows do not improve or if external financing is not secured.

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4. Recommendations

To improve Pavilion Landmark Limited’s financial wellness and stabilize the business, the following are advised:

• Immediate Cash Flow Management: Prioritize collection of debtor balances (£23,413) aggressively to improve liquidity. Negotiate extended payment terms with creditors to reduce immediate cash outflows.

• Capital Injection: Consider equity financing or shareholder loans to restore positive net assets and strengthen the balance sheet. The current negative equity position is unsustainable.

• Reduce Reliance on Group Debt: Formalize repayment plans for intra-group loans to improve creditor confidence and reduce off-balance sheet risk.

• Detailed Profit & Loss Reporting: Prepare and monitor comprehensive P&L accounts to diagnose operational performance. Identify loss-making activities and cost drivers.

• Financial Forecasting: Develop cash flow forecasts and budgets to anticipate liquidity needs and plan for contingencies — analogous to creating a treatment plan for a patient.

• Explore External Funding: Seek bank facilities, invoice financing, or investor funding targeted at small building development firms to support working capital needs.

• Operational Efficiency: Review project management and overhead costs to improve margins and reduce burn rate.

• Regular Financial Monitoring: Implement monthly financial reviews to detect early warning signs and adjust strategies proactively.

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