RE-FORM LANDSCAPE ARCHITECTURE (2023) LIMITED

Executive Summary

RE-FORM LANDSCAPE ARCHITECTURE (2023) LIMITED exhibits a strong financial foundation with solid net assets and positive working capital, indicative of good early-stage business health. Attention to liquidity management and debt reduction will be key to sustaining this health and supporting future growth. The company's employee ownership structure further strengthens its governance and long-term sustainability prospects.

RE-FORM LANDSCAPE ARCHITECTURE (2023) LIMITED - Analysis Report

Company Number: 14686440

Analysis Date: 2025-07-29 15:42 UTC

Financial Health Assessment for RE-FORM LANDSCAPE ARCHITECTURE (2023) LIMITED

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1. Financial Health Score: B

Explanation:
The company demonstrates a solid financial foundation in its first year of operations. With robust net current assets, positive net assets, and strong shareholder equity relative to liabilities, the financial "vital signs" suggest good initial health. However, the reliance on significant debt (notably hire purchase contracts) and limited cash reserves present some cautionary flags for liquidity management and operational flexibility. The absence of an income statement limits a full profitability assessment but the balance sheet data points toward a financially stable start.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	163,299	Healthy investment in long-term tangible assets and investments, indicating asset base for operations.
Current Assets	663,153	Strong short-term asset base, predominantly debtors, which may signal good client activity but potential risk if collection is slow.
Cash at Bank	21,387	Low cash balance relative to current liabilities, indicating potential liquidity tightness or timing issues in cash flow.
Debtors	641,766	Large debtor book; suggests strong sales on credit but potential "symptom of distress" if collections are delayed.
Current Liabilities	434,135	Significant short-term liabilities; manageable given net current assets but requires close monitoring.
Net Current Assets	229,018	Positive working capital ("healthy cash flow" buffer) indicating the company can cover short-term debts.
Total Assets Less Current Liabilities	392,317	Strong buffer above current liabilities, showing solid financial foundation.
Long-term Liabilities	47,836	Moderate hire purchase debt; manageable but needs monitoring as it impacts long-term liquidity.
Net Assets / Shareholders’ Funds	344,481	Indicates the company is well-capitalised with positive equity, a sign of good financial "heart" health.
Share Capital	100,000	Modest capital injection, typical for a new private limited company.
Employee Base	19 employees	Indicates a small to medium operational scale in the first year, aligned with small company status.

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3. Diagnosis: Financial Condition Analysis

• Balance Sheet Strength: The company shows a strong asset base with tangible fixed assets and investments totaling £163k, paired with substantial current assets of £663k. The positive net current assets (£229k) demonstrate the ability to meet short-term obligations, a positive sign akin to a patient having normal vital signs.

• Liquidity Considerations: Despite strong current assets, cash reserves are relatively low (£21k), highlighting a potential liquidity "symptom" requiring attention. Large debtors (£642k) form the bulk of current assets; slow collection could stress liquidity. This suggests the company needs to ensure effective credit control to maintain a steady "cash flow pulse."

• Debt Profile: The company carries hire purchase debt of approximately £54.7k (split between current and long-term liabilities). While not excessive for the asset base, it represents a fixed "debt load" that reduces financial flexibility and could be a risk if earnings are insufficient.

• Profitability Data: The absence of an income statement limits profitability analysis. However, the accumulation of retained earnings (£244k) in the first reporting period suggests early profitability or capital contributions, indicating operational "strength" but further detail would clarify.

• Governance and Control: Controlled by an employee ownership trust with majority shareholding suggests good governance and alignment of interests with employees, which supports long-term "health" and sustainability.

• Operational Scale: With 19 employees and activities focused on landscape architecture and urban planning, the company is positioned as a focused small business with capacity for growth.

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4. Recommendations: Actions to Enhance Financial Wellness

• Enhance Liquidity Management:
  Aim to increase cash reserves to avoid potential cash flow "arrhythmia." Implement tighter debtor management protocols to reduce days sales outstanding (DSO), converting receivables into cash faster.

• Monitor Debt Levels:
  Plan for repayment of hire purchase obligations to reduce leverage and improve the company's debt-equity "balance." Avoid over-reliance on hire purchase financing for future asset acquisitions if possible.

• Profitability Transparency:
  Prepare and review full income statements internally to monitor profitability drivers and cost control. This will provide a clearer "diagnosis" of operational health and support better strategic decisions.

• Strengthen Working Capital Cycle:
  Consider negotiating better payment terms with suppliers and clients to optimise the working capital cycle, ensuring the company maintains a healthy "financial pulse."

• Continue Governance Oversight:
  Leverage the employee ownership trust structure to foster engagement and long-term commitment, which supports business resilience and sustainable "immune system" against market shocks.

• Plan for Growth Prudently:
  Given the solid foundation, cautiously plan for expansion while maintaining financial discipline. Regular financial reviews will help detect early "symptoms" of distress and enable timely interventions.

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Executive Summary