REDFEARN PROPERTIES LIMITED

Executive Summary

REDFEARN PROPERTIES LIMITED has a solid property asset foundation but shows worrying signs of financial distress with negative net assets and high liabilities. Immediate actions to improve liquidity, restructure debt, and strengthen capital are critical to prevent further decline and restore financial wellness.

REDFEARN PROPERTIES LIMITED - Analysis Report

Company Number: 13537545

Analysis Date: 2025-07-20 16:47 UTC

Financial Health Assessment: REDFEARN PROPERTIES LIMITED (As of 31 July 2024)

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1. Financial Health Score: D

Explanation:
The company shows concerning signs of financial distress primarily due to a negative net asset position, indicating liabilities exceed assets. While the fixed asset base is stable and likely tied to property holdings, liquidity and working capital figures reveal potential strain. The limited current assets relative to substantial liabilities suggest the company may struggle to meet obligations without additional financing or asset sales.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£225,000	Stable asset base, primarily property, a solid "long-term asset" foundation.
Current Assets	£2,514	Very low liquid assets, indicating limited cash or receivables to cover short-term expenses.
Current Liabilities	£240,295	High short-term debts or payables, a "symptom of distress" suggesting liquidity pressure.
Net Current Assets	£2,164	Positive but very small working capital, barely sufficient to cover immediate obligations.
Creditors after 1 year	£240,295	Significant long-term debt, burden on future cash flows and solvency.
Net Assets (Equity)	-£13,131	Negative equity ("under the weather"), company owes more than it owns, a critical warning sign.
Shareholders Funds	-£13,131	Mirrors net assets, indicating accumulated losses or negative retained earnings.
Employees	2	Very small operation, micro-entity with minimal overheads but limited operational scale.

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3. Diagnosis: Financial Condition Analysis

• Asset Base: The company owns property assets valued at £225,000, which is stable year-over-year and represents the cornerstone of its value. This is a positive "strong bone structure" in the financial body.

• Liquidity and Working Capital: Despite fixed assets, the company holds only about £2,514 in current assets (cash, debtors), which is minimal. Current liabilities are extraordinarily high (£240,295), causing a mismatch between liquid resources and obligations. The net current assets figure of £2,164 seems inconsistent with the numbers shown and possibly results from an accounting presentation issue; this small buffer does not provide comfort for day-to-day operations.

• Leverage and Solvency: The total liabilities exceed assets by £13,131, which means the company’s "financial heart" is weak—liabilities outweigh equity, signaling undercapitalization and potential solvency risk. This is a key symptom of financial distress that requires immediate attention.

• Operational Scale: With only 2 employees and micro-entity status, the company operates on a small scale with limited flexibility to absorb financial shocks.

• Trend: Over the past three years, net assets have deteriorated from positive £5,106 to a negative £13,131, indicating worsening financial health despite stable fixed assets.

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4. Recommendations: Steps to Improve Financial Wellness

• Strengthen Working Capital:
  Improve liquidity by increasing current assets such as cash reserves or receivables. This might require negotiating better payment terms with creditors or accelerating receivables collections.

• Debt Restructuring:
  Explore refinancing or restructuring long-term debts to reduce immediate pressure on cash flow. Engage with lenders to possibly extend payment terms or reduce interest rates.

• Capital Injection:
  Consider an equity injection or shareholder loans to restore positive net assets and strengthen the capital base.

• Cost Control:
  Maintain strict control over operational expenses given the small scale, ensuring no unnecessary cash outflows.

• Asset Utilization:
  Evaluate the fixed asset portfolio for potential sale or leveraging through mortgages to raise funds without losing core business capability.

• Financial Monitoring:
  Implement tighter financial controls and regular cash flow forecasting to detect early symptoms of distress and respond proactively.

• Professional Advice:
  Engage financial advisors or insolvency practitioners early for tailored strategies to avoid escalation to formal insolvency processes.

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Summary

REDFEARN PROPERTIES LIMITED possesses a stable fixed asset base but suffers from a dangerously negative equity position and very high liabilities relative to liquid assets. These symptoms point to liquidity strain and solvency risk, signaling an urgent need for financial restructuring and capital strengthening to restore health. Without intervention, the company’s financial condition may deteriorate further, threatening operational viability.