SANDPIPER TKL (MANOR FARM) LIMITED

Executive Summary

Sandpiper TKL (Manor Farm) Limited shows signs of operational activity but faces tightening liquidity and a notable shrinkage in net assets, indicating moderate financial stress. The company’s cash position has improved, yet working capital is minimal and related party debt introduces risk. Proactive working capital management, addressing equity erosion, and close monitoring of related party liabilities are critical to stabilizing financial health and sustaining growth in its building development projects.

SANDPIPER TKL (MANOR FARM) LIMITED - Analysis Report

Company Number: 14193508

Analysis Date: 2025-07-29 15:04 UTC

Financial Health Assessment: SANDPIPER TKL (MANOR FARM) LIMITED

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1. Financial Health Score: C

This company scores a "C" grade, indicating a moderate financial condition with some warning signs. The business is operational and solvent but shows symptoms of tightening liquidity and shrinking net assets, which require close monitoring and management intervention to avoid deterioration.

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2. Key Vital Signs:

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	1,872,340	2,865,136	Decreased current assets indicate possible reduced liquidity.
Cash at Bank	150,542	1,914	Cash position improved significantly, a positive sign of available liquid funds.
Debtors	11,081	21,127	Lower receivables, possibly faster collections or lower sales on credit.
Current Liabilities	1,755,221	2,288,909	Decrease in short-term obligations is positive but still substantial compared to cash flow.
Net Current Assets (Working Capital)	117,119	576,227	Sharp decline in working capital signals reduced short-term financial flexibility.
Net Assets / Shareholders' Funds	117,119	576,227	Significant reduction in net worth; the company’s equity base is shrinking, a symptom of stress.
Bank Loans & Overdrafts	861,891	1,858,069	Bank debt almost halved, reducing financial burden and interest exposure.
Trade Creditors	5,292	243,220	Dramatic reduction suggests better payment terms or fewer purchases on credit.
Other Creditors (Related party)	499,527	0	New significant related-party debt, interest-free but repayable on demand; potential liquidity risk.

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3. Diagnosis:

• Liquidity Status: The company's "healthy cash flow" is suggested by the increased cash balance (£150k) despite a decrease in overall current assets. However, the very tight net current assets (working capital of just £117k) reveal a "symptom of distress," implying limited buffer to cover short-term obligations.

• Solvency and Capital Structure: The net assets have dropped markedly from £576k to £117k, indicating the company is losing equity. This decline may be due to operating losses, asset write-downs, or distributions but is not detailed in the available data since profit and loss accounts are not filed publicly. The company remains solvent but with a thinner equity cushion, which is a warning signal.

• Debt Profile: Bank loans and overdrafts have reduced substantially, which reduces financial risk. However, a new significant amount owed to a related party (£499k) introduces potential risk, especially as these are interest-free but repayable on demand, implying potential liquidity pressure if called.

• Operational Activity: The SIC code 41100 indicates the company is engaged in development of building projects, which typically involves substantial work-in-progress and project financing. The work in progress (stocks) has decreased from £2.84M to £1.71M, suggesting either project completion or scale-back in operations.

• Governance and Control: The company is controlled by two entities each holding 25-50% shares and voting rights, indicating balanced but possibly complex ownership. Directors appear to be experienced and stable, which supports governance continuity.

• Filing and Compliance: Accounts and confirmation statements are filed on time, suggesting good compliance and reducing regulatory risk.

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4. Recommendations:

1. Improve Working Capital Management
   The company’s narrow working capital buffer is a "warning symptom" that could lead to liquidity crunches. Focus on managing receivables and payables more efficiently to increase net current assets. Consider negotiating longer payment terms with creditors or accelerating debtor collections.

2. Address Equity Erosion
   Investigate and address the causes of the sharp decline in net assets. If operational losses are driving this, implement cost controls and improve profitability. If asset impairment or dividends caused the drop, reassess financial strategy to rebuild equity.

3. Monitor Related Party Debt
   The £499k interest-free amount owed to a related party is a liquidity risk, as it is repayable on demand. Maintain transparent communication with related parties about repayment terms and explore formalizing this liability to reduce uncertainty.

4. Cash Flow Forecasting and Contingency Planning
   Regular cash flow forecasting is essential to anticipate liquidity needs, especially given the volatile nature of development projects. Establish contingency lines of credit or other financing to cover unexpected shortfalls.

5. Strategic Review of Project Pipeline
   Evaluate current and future building projects for profitability and cash requirements. Avoid overextension, as this sector can consume significant resources upfront.

6. Enhance Financial Reporting
   Consider voluntarily providing more detailed profit and loss information to stakeholders to improve transparency and early detection of financial stresses.

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