SBRR PROPERTIES LTD

Executive Summary

SBRR PROPERTIES LTD maintains strong cash reserves and a stable asset base but carries significant secured debt, leading to a thin equity cushion. While liquidity appears healthy short-term, the company should focus on strengthening its capital structure and managing leverage to secure future financial health.

SBRR PROPERTIES LTD - Analysis Report

Company Number: 13177703

Analysis Date: 2025-07-19 13:06 UTC

Financial Health Assessment of SBRR PROPERTIES LTD (as of 29 February 2024)

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1. Financial Health Score: C

Explanation:
SBRR PROPERTIES LTD shows a moderate financial standing with some positive signs but also symptoms of financial strain. The company’s net assets and shareholders' funds have grown but remain modest relative to its liabilities. The heavy reliance on secured long-term debt (bank loans) and high current liabilities cause concern around liquidity and working capital health, warranting careful monitoring and corrective actions.

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2. Key Vital Signs

Metric	Value (2024)	Interpretation
Net Assets	£24,145	Positive net assets indicate the company is solvent but equity is thin relative to liabilities.
Current Assets	£86,566	Healthy cash balance (£85,924) is a strong liquidity indicator.
Current Liabilities	£655,163	Very high short-term obligations compared to current assets, a symptom of liquidity stress.
Net Current Assets (Working Capital)	-£568,597* (see note)	Negative working capital when including all current liabilities, indicating potential short-term liquidity risk.
Long-term Debt (Bank loans + other creditors)	£655,163	Significant leverage; debt secured on investment property.
Investment Property (Fixed Asset)	£597,739	Valuable asset base, stable valuation year-on-year.
Cash to Current Liabilities Ratio	~0.13 (13%)	Low coverage of current liabilities by cash, indicating short-term cash flow vulnerability.

*Note: The accounts show "Current Liabilities" at £655,163, but the detailed notes split this into amounts falling due within one year (£4,997) and amounts falling due after more than one year (£655,163). The large figure is mostly long-term debt. For working capital calculation, only one-year liabilities (£4,997) should be considered. Thus:

• Net Current Assets = Current Assets (£86,566) - Current Liabilities within one year (£4,997) = £81,569 (as reported).

This shows a healthy working capital position.

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3. Diagnosis: Interpreting the Financial Symptoms

• Healthy Cash Flow and Liquidity:
  The company holds a strong cash position (£85,924) relative to its short-term liabilities (£4,997), indicating a healthy cash flow symptom and ability to meet immediate obligations.

• Leveraged but Asset-backed:
  The company carries significant long-term liabilities (£655,163), primarily bank loans secured by investment property valued at £597,739. This means the company is highly leveraged but has solid collateral backing the debt, which offers some financial breathing room.

• Stable Asset Base:
  The investment property’s valuation remains unchanged year-on-year, suggesting stability in the core asset’s value, which is critical for the company’s financial health.

• Equity Growth but Thin Capital Base:
  Shareholders' funds have increased from £11,154 (2023) to £24,145 (2024), showing retained earnings growth. However, this equity remains small compared to total liabilities, which is a cautionary sign akin to a patient with thin vital signs—solvent but vulnerable.

• No Employees and Minimal Debtors:
  The company has no employees and minimal debtors, indicating low operational complexity and limited credit risk from customers, which is positive for financial control.

• Absence of Income Statement:
  The accounts do not include an income statement or profit and loss details, limiting insights into profitability and operational performance, which are critical for a full diagnosis. This is a diagnostic blind spot.

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4. Recommendations: Prescriptions for Financial Wellness

• Strengthen Equity Base:
  Consider measures to build retained earnings or inject capital to increase shareholder funds, reducing financial vulnerability and improving solvency ratios.

• Manage Debt Levels:
  Evaluate refinancing options to reduce interest costs or extend maturities, and assess strategies to gradually reduce bank loans to improve the debt profile.

• Enhance Cash Flow Visibility:
  Implement detailed cash flow forecasting and monitoring to anticipate liquidity needs and avoid symptoms of distress such as cash shortages.

• Profitability Reporting:
  Prepare and review internal profit and loss reports regularly to identify operational efficiencies or losses, enabling proactive management of financial health.

• Risk Management:
  Regularly revalue investment property and monitor market conditions to anticipate and mitigate asset value risks.

• Compliance and Governance:
  Maintain timely filings and ensure transparency with stakeholders to avoid regulatory symptoms such as penalties or reputational damage.

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Executive Summary

SBRR PROPERTIES LTD exhibits a stable asset base supported by significant investment property holdings and a healthy cash position to meet immediate liabilities. However, the company is highly leveraged with thin equity, signaling a need to improve its capital structure and monitor liquidity carefully. Strengthening shareholder funds and managing debt prudently will be critical to ensuring long-term financial wellness.