SNN HOLDINGS (N.I.) LTD

Executive Summary

SNN HOLDINGS (N.I.) LTD shows early signs of financial recovery with positive equity following asset revaluation but remains challenged by significant liquidity pressures due to negative working capital. Immediate focus on cash flow management and leveraging fixed assets will be critical to stabilizing the company’s financial health and supporting sustainable growth.

SNN HOLDINGS (N.I.) LTD - Analysis Report

Company Number: NI677753

Analysis Date: 2025-07-29 14:45 UTC

Financial Health Assessment for SNN HOLDINGS (N.I.) LTD as of 31 March 2024

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1. Financial Health Score: C

Explanation:
The company shows a mixed financial profile. On one hand, there is a positive net asset base and shareholders' funds after revaluation of fixed assets, signaling some recovery from prior losses. On the other hand, working capital remains deeply negative, with current liabilities far exceeding current liquid assets, indicating symptoms of liquidity distress. Overall, the company is in a fragile but improving state, warranting cautious optimism.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Cash at bank	£1,384	Minimal cash reserves, indicating tight immediate liquidity; "thin pulse" in cash flow terms.
Current liabilities	£255,323	High short-term obligations; "heavy burden" due soon, raising risk of cash flow strain.
Net current assets (working capital)	-£253,939	Negative working capital indicates "symptoms of liquidity distress" — current debts greatly exceed short-term assets.
Fixed assets (land/buildings)	£325,000	Significant long-term tangible assets, enhanced by recent £80k revaluation; "solid bone structure."
Shareholders Funds (Equity)	£71,061	Positive equity reflecting net asset value after revaluation; sign of "improved vitality."
Profit & Loss Reserves	-£8,941	Accumulated losses remain, suggesting "past ailments" impacting retained earnings.
Bank loans (within current liabilities)	£72,242	Notable portion of current liabilities is bank debt, highlighting upcoming repayment pressure.

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3. Diagnosis

• Liquidity Concern: The company is exhibiting "symptoms of distress" in liquidity management. Current liabilities are nearly 185 times the available cash, and net current assets are deeply negative. This indicates the company may struggle to meet short-term obligations without additional cash inflows or refinancing.

• Asset Strength: The tangible fixed assets (land and buildings) valued at £325,000, including a recent revaluation adding £80,000, provide a strong asset base. This "healthy skeleton" could support borrowing or sale if liquidity issues worsen.

• Capital Structure: The company has moved from negative equity in prior years to positive shareholders’ funds in 2024, mainly due to revaluation reserves. This improvement is a "sign of recovery," but the underlying trading results remain weak given the negative retained earnings.

• Operational Scale: The company employs 2 people on average, indicating a very small operational scale consistent with a micro/small business profile. Low employee count reduces overhead but may limit operational flexibility.

• No Audit Requirement: The accounts are unaudited but prepared under small company exemptions, so while the figures are official, they may not have undergone rigorous external validation.

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4. Recommendations

1. Improve Liquidity Management
   Implement strict cash flow controls and consider negotiating extended payment terms with creditors or restructuring short-term debts to reduce immediate pressure on cash reserves.

2. Leverage Asset Base
   Explore options to monetize or refinance the tangible fixed assets. The recent revaluation enhances borrowing capacity and can be used as collateral to obtain working capital or bridge financing.

3. Address Retained Losses
   Develop a clear profitability improvement plan focusing on increasing revenues or reducing costs to rebuild profit and loss reserves, thus strengthening the company’s financial "immune system."

4. Regular Financial Monitoring
   Establish monthly financial health checks focusing on cash flow projections and working capital to detect early warning signs and act proactively.

5. Stakeholder Communication
   Maintain transparent communication with directors, shareholders, and lenders regarding financial status and recovery plans to preserve confidence and support.

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