STOKE HILL ESTATES LIMITED

Executive Summary

STOKE HILL ESTATES LIMITED is currently experiencing financial distress reflected by negative net assets and severely negative working capital, limiting its ability to meet short-term liabilities. Despite a stable asset base in real estate, low turnover and liquidity challenges pose significant operational risks. Immediate actions to improve cash flow, increase revenue, and manage debts are essential to restore financial health and ensure business continuity.

STOKE HILL ESTATES LIMITED - Analysis Report

Company Number: 13574997

Analysis Date: 2025-07-29 14:54 UTC

Financial Health Assessment of STOKE HILL ESTATES LIMITED

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1. Financial Health Score: D

Explanation:
The company is exhibiting symptoms of financial distress, primarily due to persistent negative net assets (shareholders’ funds) and significant working capital deficits. While it remains an active entity with no overdue filings, the financial position indicates a fragile balance sheet and limited liquidity. This warrants concern and close monitoring.

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2. Key Vital Signs

Metric	Latest Value (2024)	Interpretation
Fixed Assets	£443,223	Stable long-term asset base, likely property or real estate holdings consistent with SIC code.
Current Assets	£9,245	Very low liquid assets (cash/debtors/inventory), indicating weak immediate financial flexibility.
Current Liabilities	£526,669	High short-term obligations, a red flag for liquidity management.
Net Current Assets (Working Capital)	-£517,424	Negative working capital shows inability to cover short-term debts with current assets.
Total Assets Less Current Liabilities	-£74,201	Overall asset base is insufficient to cover short-term debts, showing insolvency on a going concern basis.
Shareholders’ Funds (Net Assets)	-£75,202	Negative equity indicates accumulated losses or liabilities exceeding assets; a critical concern.
Turnover (2023)	£17,312	Very low revenue for the size of liabilities; insufficient income generation to support operations.

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3. Diagnosis: What the Financial Data Reveals

The company’s financial “vital signs” reveal serious symptoms of distress:

• Liquidity crisis: The company has very limited current assets (£9,245) compared to very high current liabilities (£526,669), suggesting it cannot meet short-term obligations without external support or asset sales.
• Negative net assets: Persistent negative equity over multiple years (-£75k in 2024, -£81k in 2023) signals ongoing losses or undercapitalization, which means the business has effectively been operating “in the red.”
• Low turnover: The revenue figure of £17,312 (2023) is minimal relative to liabilities, indicating poor operational performance or a start-up phase with limited income.
• Asset base: Fixed assets remain stable around £443k, showing the company owns property or similar long-term assets, consistent with its real estate letting activities. However, these assets alone do not currently provide enough value to cover liabilities.
• No audit and micro-entity reporting: Reduced reporting requirements limit detailed insight but also suggest smaller scale operations.
• Management and control: Directors hold significant ownership and voting rights, implying decisions are closely held but also concentrated risk.

In medical analogy, the company is like a patient with a strong but “immobile” organ (fixed assets) but dangerously low “blood flow” (cash and liquid resources), and “debt pressure” compressing the system, causing poor overall health.

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4. Recommendations: Path to Financial Wellness

1. Improve Liquidity:

   • Inject additional capital or arrange short-term financing to cover immediate liabilities.
   • Accelerate debt collection or reduce payables where possible to improve working capital.

2. Enhance Revenue Generation:

   • Increase rental income or explore alternative revenue streams aligned with property assets.
   • Review pricing strategy and occupancy levels to maximize turnover.

3. Cost Control and Efficiency:

   • Review operating expenses to reduce overheads, preventing further depletion of equity.
   • Consider restructuring debts to manageable terms with creditors.

4. Asset Utilization:

   • Evaluate fixed assets for potential sale or refinancing to release cash.
   • Optimise property management to enhance returns from existing assets.

5. Financial Reporting and Monitoring:

   • Maintain timely and accurate filings to avoid regulatory penalties.
   • Consider engaging an independent financial advisor to assist with restructuring and financial planning.

6. Governance and Risk Management:

   • Directors should monitor cash flows rigorously and prepare contingency plans.
   • Transparent communication with stakeholders is critical to maintain trust and support.

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