P&M PROPERTY (NW) LIMITED

Executive Summary

P&M PROPERTY (NW) LIMITED holds a solid property asset base but faces significant short-term liquidity challenges indicated by negative working capital. The company is in an early growth phase with limited trading history and requires focused cash flow management and financing restructuring to improve financial resilience. Addressing liquidity and enhancing operational transparency will be critical to achieving a healthier financial position.

P&M PROPERTY (NW) LIMITED - Analysis Report

Company Number: 14528314

Analysis Date: 2025-07-29 12:57 UTC

Financial Health Assessment of P&M PROPERTY (NW) LIMITED

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1. Financial Health Score: C

Explanation:
The company shows a modest equity base with net assets of £44,753 and a total asset value dominated by investment property (£257,113). However, it has significant current liabilities (£264,919) exceeding current assets (£7,459), resulting in a large working capital deficit (net current liabilities of £-257,460). This liquidity strain is a symptom of financial distress despite the strength in fixed assets. The absence of audit and limited trading history (incorporated late 2022) means caution is warranted. The company is neither in immediate crisis nor robustly healthy, hence a middle-grade score.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	302,213	Strong asset base, mainly investment property (fair-valued).
Current Assets	7,459	Very low short-term assets; mainly debtors, minimal cash.
Current Liabilities	264,919	High short-term obligations, indicating liquidity pressure.
Net Current Assets (Working Capital)	-257,460	Negative; indicates potential difficulty meeting short-term debts.
Net Assets (Shareholders' Funds)	44,753	Positive but small equity base relative to liabilities.
Share Capital	100	Minimal capital injection; typical for a new small company.
Number of Employees	2	Very small company size.
Turnover (Rental Income)	Not disclosed	No turnover data available; likely minimal or newly started.

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3. Diagnosis

P&M PROPERTY (NW) LIMITED's financial "vital signs" reveal a company with a solid fixed asset (property) base but significant liquidity issues, as evidenced by a large working capital deficit. This is akin to a patient having a strong heart (valuable property assets) but suffering from poor blood circulation (cash flow and short-term liquidity). The high current liabilities relative to current assets suggest the company may struggle to meet immediate obligations without additional funding or asset sales.

The company’s accounting policies show prudent valuation of investment property at fair value, which supports asset strength. However, the low cash and debtors indicate limited operational cash inflow or slow collections. The absence of turnover figures and profit & loss details limits insight into operational performance, but the directors did not provide a profit and loss account, hinting at minimal trading or early-stage development.

Given the company was incorporated in December 2022 and is classified as a small private limited company under the total exemption full accounts regime, it is still in its infancy. The large current liabilities may reflect acquisition financing or short term loans linked to the property purchase.

Overall, the company exhibits symptoms of early-stage financial stress due to short-term liquidity constraints but has a strong fixed asset base which can be leveraged to improve financial health.

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4. Recommendations

• Improve Liquidity:

  • Secure additional working capital through equity injection or long-term financing to cover current liabilities and reduce liquidity strain.
  • Negotiate extended payment terms with creditors or refinance short-term debts into longer-term obligations.

• Enhance Cash Flow Management:

  • Accelerate debtor collections and increase cash reserves to maintain a "healthy cash flow" and reduce liquidity risk.
  • Monitor and forecast cash flows regularly to anticipate and manage short-term funding needs.

• Operational Transparency:

  • Start preparing and sharing management accounts including profit and loss statements to provide clearer insight into operational performance and profitability.
  • Track rental income growth and occupancy rates closely, as this is the core revenue stream.

• Asset Utilisation:

  • Consider leveraging investment property for additional financing if liquidity issues persist, e.g., mortgage or sale and leaseback arrangements.
  • Regularly review property valuations and market conditions to optimize asset value.

• Governance and Compliance:

  • Ensure all filings remain up to date to avoid penalties and maintain stakeholder confidence.
  • Plan for audit readiness as company grows, to enhance transparency and credibility.

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