SM PROPERTY VENTURES LIMITED

Executive Summary

SM PROPERTY VENTURES LIMITED is experiencing financial distress characterized by negative equity and severe liquidity challenges. Despite asset growth, the company’s working capital deficit and high liabilities pose risks to solvency. Immediate actions to improve cash flow, restructure debt, and possibly inject equity are recommended to restore financial health and sustainability.

SM PROPERTY VENTURES LIMITED - Analysis Report

Company Number: 13800625

Analysis Date: 2025-07-29 19:15 UTC

Financial Health Assessment of SM PROPERTY VENTURES LIMITED

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1. Financial Health Score: D

Explanation:
The company exhibits clear signs of financial distress with negative net assets and worsening liquidity ratios over the past two years. While it remains active, the balance sheet reveals symptoms of financial strain, reducing confidence in its ability to sustain operations without remedial action.

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2. Key Vital Signs

Metric	2023 Value	Interpretation
Fixed Assets	£746,674	Significant investment in property/long-term assets, showing asset base growth since 2022.
Current Assets	£174,106	Low liquid assets compared to liabilities, indicating limited short-term financial flexibility.
Current Liabilities	£617,534	High short-term debts creating working capital pressure.
Net Current Assets (Working Capital)	-£443,040	Negative working capital signals cash flow problems; company owes more in short term than it owns.
Total Assets Less Current Liabilities	£303,634	Positive but insufficient to cover all liabilities.
Creditors Due After One Year	£385,640	Substantial long-term debt; increases financial risk if not managed properly.
Net Assets (Shareholders’ Funds)	-£82,906	Negative equity indicates the company owes more than it owns, a critical symptom of financial distress.

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3. Diagnosis: Financial Condition Analysis

SM PROPERTY VENTURES LIMITED is currently in a fragile financial state. The company’s balance sheet reveals a growing asset base primarily in fixed assets, likely property holdings or investments, consistent with its SIC code related to letting and operating real estate. However, this asset growth is overshadowed by a severe liquidity crunch, evidenced by a large negative net current asset position (-£443k), indicating the company may struggle to meet its short-term obligations.

The negative shareholders’ funds (equity) of approximately -£83k highlight that liabilities exceed assets, a key symptom of financial distress that could threaten solvency if not addressed. This negative net worth has worsened from previous years, showing a deteriorating financial condition.

The company currently has no employees, suggesting it may be a holding or investment vehicle rather than an operational business. The high current liabilities compared to current assets suggest heavy reliance on short-term financing or payables, which poses risk if creditors demand repayment or if refinancing becomes difficult.

The long-term creditors amounting to £385,640 also represent a significant burden. Without sufficient cash flow or asset liquidation, meeting these obligations could be challenging.

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4. Recommendations: Steps to Improve Financial Wellness

• Improve Liquidity Management:
  The company needs to strengthen its working capital position. This could involve negotiating extended payment terms with creditors, accelerating receivables (if any), or converting some fixed assets to cash if possible.

• Equity Injection or Debt Restructuring:
  To restore a positive net asset position, consider injecting new equity or restructuring existing debt to reduce immediate liabilities and improve solvency.

• Cash Flow Forecasting:
  Implement rigorous cash flow forecasting to anticipate liquidity shortfalls and proactively manage obligations to avoid defaults.

• Operational Review:
  Although currently no employees are reported, evaluate if operational efficiencies or cost reductions are possible to reduce financial strain.

• Engage Financial Advisor:
  Consulting with a financial restructuring expert could provide tailored strategies to stabilize and grow the business.

• Regular Monitoring:
  Frequent review of financial KPIs is essential to detect early symptoms of distress and take prompt corrective actions.

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Medical Analogy Summary

SM PROPERTY VENTURES LIMITED’s financial “vital signs” show a heart struggling to pump efficiently due to poor liquidity (“healthy cash flow”) and a body burdened with excess liabilities (“symptoms of distress”). Without intervention, the company’s financial “immune system” is weakened, risking insolvency. Timely treatment via liquidity support and balance sheet repair is crucial for recovery and long-term health.

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