PV PROPERTIES OBAN LIMITED

Executive Summary

PV Properties Oban Limited currently exhibits financial distress with negative net assets and significant liquidity challenges. While turnover has increased slightly, high current liabilities far exceed available cash and current assets, placing the company at risk of short-term cash flow problems. Prompt action focused on improving liquidity, controlling costs, and restructuring debts is essential to restore financial health and avoid insolvency.

PV PROPERTIES OBAN LIMITED - Analysis Report

Company Number: SC751317

Analysis Date: 2025-07-29 12:09 UTC

Financial Health Assessment of PV Properties Oban Limited

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1. Financial Health Score: D

Explanation:
PV Properties Oban Limited is showing concerning financial signals with a negative net asset position and deeply negative working capital. Despite being a relatively new company (incorporated in late 2022) and operating in the property letting sector, its financial "vital signs" resemble symptoms often associated with financial distress. The loss-making trend, combined with significant current liabilities exceeding current assets by a wide margin, places the company in a precarious financial state. The score of "D" reflects serious warning signs but not yet critical failure or insolvency.

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2. Key Vital Signs and Interpretation

Metric	2024 Value	Interpretation
Turnover (Revenue)	£21,770	Very low revenue for a property letting company; slight growth from previous year but still minimal.
Operating Loss	£5,274 loss	Company is not covering its administrative expenses; a small but increasing loss from prior year.
Current Assets	£20,441	Includes cash (£9,219) and debtors; relatively low liquidity buffer.
Current Liabilities	£338,812	Very high short-term obligations compared to current assets; potential liquidity crunch.
Net Current Assets (Working Capital)	-£318,371	Severely negative; indicates inability to meet short-term debts with short-term assets.
Net Assets (Equity)	-£5,181	Negative net assets indicate the company’s liabilities exceed its assets, a sign of financial strain.
Shareholders’ Funds	-£5,181	Mirrors net assets; shareholders' equity is in deficit, reflecting accumulated losses.
Tangible Assets (Property)	£313,190	Fixed asset base is substantial but likely illiquid; property assets are not easily converted to cash.
Average Employees	2	Small operation, consistent with micro/small company status.

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3. Diagnosis: Financial Health Overview

PV Properties Oban Limited’s financial "vital signs" reveal a business struggling to maintain financial equilibrium. The company’s core asset is a property valued at £313,190, with minimal turnover generated from letting activities. However, the company is burdened by current liabilities exceeding £338,000, which are more than 16 times its annual turnover and over 15 times its cash reserves.

This severe mismatch between current assets and liabilities exhibits what could be described as "acute liquidity distress" — the company may struggle to pay its short-term debts as they fall due. The negative net assets position implies the company is "underwater," meaning its total liabilities exceed its total assets, a classic symptom of financial fragility.

The small operating loss indicates the company is not yet in a freefall but is not generating enough income to cover its costs and improve its financial position. The company’s cash reserves have also diminished from £13,593 to £9,219 in a year, underscoring ongoing cash outflows surpassing inflows.

From a "medical" perspective, the company’s financial system shows early to moderate signs of distress: its "heartbeat" (cash flow and revenue) is weak, and the "vital organs" (assets vs liabilities) are under strain. Without intervention, these symptoms could worsen, leading to insolvency.

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4. Recommendations: Actions to Improve Financial Wellness

• Immediate Cash Flow Management:
  Prioritize improving liquidity by either renegotiating payment terms with creditors to reduce immediate liabilities or by injecting additional working capital (e.g., shareholder loans or equity). This is akin to stabilizing a patient’s blood pressure to prevent collapse.

• Increase Revenue Generation:
  Explore strategies to increase rental income or diversify property portfolio to boost turnover. Consider reviewing rental pricing, marketing vacant properties actively, or adding complementary services.

• Cost Control:
  Analyze administrative and operating expenses closely to identify and cut non-essential costs, slowing the cash burn rate. This can be compared to reducing metabolic stress on the body.

• Asset Utilization:
  Evaluate the possibility of selling non-core or underutilized assets to improve liquidity and reduce debt load. While the property asset is substantial, converting some property or equity to cash could improve solvency.

• Debt Restructuring:
  Engage with creditors to restructure or refinance current liabilities to more manageable levels or longer terms, reducing short-term pressure.

• Regular Financial Monitoring:
  Establish robust cash flow forecasting and financial controls to detect early warning signs of distress and make timely decisions.

• Professional Advice:
  Given the negative equity and working capital deficit, consulting insolvency practitioners or financial advisors to explore turnaround options or formal restructuring may be prudent.

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