STRUCK BRICKWORK LTD

Executive Summary

Struck Brickwork Ltd is currently in a fragile financial state marked by negative working capital and shareholders’ funds, indicating liquidity and capital deficiencies. Despite some improvement in cash holdings, the company faces ongoing pressure from rising short-term liabilities and accumulated losses. Immediate actions to improve cash flow, restructure debt, and inject capital are recommended to restore financial health and viability.

STRUCK BRICKWORK LTD - Analysis Report

Company Number: 13584816

Analysis Date: 2025-07-29 13:15 UTC

Financial Health Assessment for Struck Brickwork Ltd as of 31 August 2024

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1. Financial Health Score: D

Explanation:
Struck Brickwork Ltd exhibits signs of financial distress with persistent negative net current assets and shareholders' funds over the last three years. The company's liquidity position is weak, and its equity base is in significant deficit. These symptoms suggest the company is struggling to meet short-term obligations and is reliant on external support or restructuring to regain financial health.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	14,749	24,742	Low level of liquid and short-term assets; declining trend
Cash at Bank	12,949	3,995	Improvement in cash holding, a positive sign for liquidity
Debtors	1,800	20,747	Sharp reduction in receivables; may indicate cash collection efforts or lower sales
Current Liabilities	37,557	30,972	High short-term debts; increasing pressure on liquidity
Net Current Assets (Working Capital)	(22,808)	(6,230)	Negative and worsening; indicates liquidity strain
Shareholders' Funds (Equity)	(22,814)	(6,236)	Negative equity; signals accumulated losses and financial stress

Interpretation of Vital Signs:

• The company is running a negative working capital "deficit", meaning current liabilities exceed current assets by a substantial margin. This is akin to a patient with a dangerously low blood count—there is insufficient "financial oxygen" to meet immediate obligations.
• Despite an increase in cash reserves in 2024, the overall cash position is still insufficient to cover the rising current liabilities.
• The precipitous drop in debtors could mean either improved collections or reduced sales activity; further investigation is warranted.
• Persistent negative equity (shareholders' funds) indicates the company’s accumulated losses have eroded its capital base, a chronic symptom of financial distress.

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3. Diagnosis

Struck Brickwork Ltd is showing clear "symptoms of financial distress":

• Liquidity Crisis: The company’s current liabilities significantly exceed its current assets, indicating difficulty meeting short-term debts. This "cash flow congestion" could lead to payment defaults if not addressed.
• Capital Deficiency: Negative shareholders’ funds reveal that losses over time have consumed the company's invested capital, akin to a "weak immune system" unable to support business operations without external help.
• No Employees: The absence of employees suggests either a very small or inactive operational footprint, which may limit revenue generation and exacerbate financial strain.
• Industry Risk: Operating in a specialised construction niche (SIC 43999) typically involves project-based work with cash flow variability. Without strong working capital, the company may struggle to fund ongoing contracts.

Overall, the company is in a fragile financial state, requiring immediate intervention to stabilize liquidity and rebuild equity.

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4. Recommendations

1. Improve Working Capital Management:

   • Accelerate debtor collections and tighten credit controls to convert receivables into cash more rapidly.
   • Negotiate extended payment terms with creditors to reduce short-term pressure.

2. Capital Injection or Restructuring:

   • Seek additional equity funding or shareholder loans to shore up negative equity and provide a cash buffer.
   • Explore refinancing options to convert short-term debt into longer-term liabilities.

3. Cost Control:

   • Minimize operating expenses and overheads given the absence of employees and likely limited revenue.
   • Consider strategic downsizing or restructuring contracts to restore profitability.

4. Cash Flow Forecasting and Monitoring:

   • Implement rigorous cash flow forecasting to anticipate liquidity shortfalls and manage "financial vitals" proactively.
   • Regular financial health checks to detect early warning signs and adjust strategies accordingly.

5. Professional Advice:

   • Engage insolvency or restructuring specialists if financial pressures intensify to explore formal options before distress escalates to insolvency.

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Medical Analogy Summary

Struck Brickwork Ltd shows symptoms of financial distress like a patient with dangerously low blood pressure (negative working capital) and a compromised immune system (negative equity). While there is some improvement in cash reserves, the overall prognosis is guarded without prompt treatment—focused on restoring liquidity and capital health—to prevent "organ failure" of the business.

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