SF SECURITY SERVICES LTD

Executive Summary

SF Security Services Ltd is currently financially distressed, with severe liquidity shortages and negative equity persisting over multiple years. While compliant with regulatory filings, the company struggles to cover its short-term liabilities, indicating potential solvency risks. Immediate capital infusion and operational restructuring are essential to restore financial health and ensure future viability.

SF SECURITY SERVICES LTD - Analysis Report

Company Number: 13729517

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

Financial Health Assessment of SF SECURITY SERVICES LTD

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1. Financial Health Score: D

Explanation:
SF Security Services Ltd is showing clear symptoms of financial distress. The company has persistent and significant negative net current assets (working capital deficit) and negative shareholders' funds for multiple years, indicating an ongoing struggle to cover short-term liabilities with current assets. This is a critical "vital sign" that signals liquidity problems and potential solvency issues. While the company remains active and compliant with filings, it is in a precarious financial position requiring urgent attention.

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2. Key Vital Signs:

Metric	Latest Value (2024)	Interpretation
Current Assets	£3	Extremely low current assets, almost no liquid resources available.
Current Liabilities	£1,901	Short-term obligations significantly exceed current assets, indicating liquidity stress.
Net Current Assets (Working Capital)	-£1,898	Negative working capital is a strong symptom of financial distress; inability to cover debts due within a year.
Shareholders' Funds (Equity)	-£1,898	Negative equity suggests accumulated losses or capital erosion, putting solvency at risk.
Average Number of Employees	1	Very small scale operation, which limits revenue generation potential but also limits fixed cost exposure.
Filing Status	Up to date	No overdue filings, indicating compliance with regulatory requirements.

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3. Diagnosis:

SF Security Services Ltd exhibits classic symptoms of financial strain, primarily due to insufficient liquidity and persistent negative equity. Despite being a micro-entity (which limits complexity), the company’s financial position reveals a chronic inability to generate or retain sufficient funds to meet liabilities. The consistent negative net current assets over three consecutive years, with current liabilities vastly outweighing current assets, indicate that the company may struggle to pay creditors on time, risking supplier relationships and operational continuity.

The negative shareholders' funds further underline that the company’s liabilities exceed its assets, suggesting accumulated losses or undercapitalization. This "illness" in the balance sheet could be the result of operational losses, insufficient capital injections, or delayed revenue generation typical in early-stage companies.

On the positive side, the company has maintained compliance with filing deadlines and has a stable directorship structure following the recent change. The small size (one employee) limits overheads but also means growth and revenue generation may be limited.

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4. Recommendations:

1. Improve Liquidity ("Boost the heartbeat"):

   • Inject additional capital either through shareholder loans or equity to restore positive working capital.
   • Negotiate extended payment terms with creditors to alleviate short-term cash pressure.
   • Accelerate receivables collection if applicable to increase available cash.

2. Operational Review ("Address root causes"):

   • Analyze revenue streams and cost structure to identify if the current business model is sustainable.
   • Consider cost reduction strategies or seek new contracts to increase turnover.

3. Financial Planning and Monitoring ("Regular health check-ups"):

   • Implement robust cash flow forecasting to anticipate liquidity gaps.
   • Regularly monitor key financial ratios and KPIs to detect early signs of distress.

4. Seek Professional Support:

   • Engage a financial advisor or turnaround specialist to develop a recovery plan.
   • Consider whether restructuring or refinancing options are available to stabilize finances.

5. Governance and Control:

   • With a single controlling shareholder and director, ensure strong governance practices to maintain transparency and strategic focus.

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