SUNKISSED (MARCH) LTD

Executive Summary

SUNKISSED (MARCH) LTD is in a fragile financial state with negative net assets and working capital, signaling liquidity distress and insolvency risk. Urgent action to improve cash flow, manage debt, and control costs is essential to restore financial health and sustainability.

SUNKISSED (MARCH) LTD - Analysis Report

Company Number: 14157120

Analysis Date: 2025-07-29 20:51 UTC

Financial Health Assessment for SUNKISSED (MARCH) LTD

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1. Financial Health Score: D

Explanation:
SUNKISSED (MARCH) LTD exhibits significant financial distress symptoms including persistent negative net assets and net current liabilities. The company’s liquidity position is weak, with current liabilities far exceeding current assets, indicating a struggle to cover short-term obligations. The negative shareholders’ funds reflect accumulated losses, pointing to ongoing financial challenges. These factors warrant a low grade, signaling urgent attention to financial restructuring and operational improvements.

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2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Current Assets	4,059	Very low liquid and short-term assets.
Cash at Bank	3,809	Limited cash buffer available.
Current Liabilities	28,245	High short-term debts and obligations.
Net Current Assets (Working Capital)	-24,186	Negative working capital; cash flow distress.
Net Assets (Total Equity)	-11,878	Company is insolvent on a balance sheet basis.
Shareholders’ Funds	-11,978	Accumulated losses eroding equity base.
Tangible Fixed Assets (Net Book Value)	12,308	Some investment in assets, but not enough to cover liabilities.
Average Employees	5	Small workforce consistent with a micro/small entity.

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3. Diagnosis

SUNKISSED (MARCH) LTD shows clear symptoms of financial distress, akin to a patient with a weak heartbeat and poor circulation. The negative working capital (net current assets) indicates the company does not have sufficient short-term assets to meet its immediate liabilities, a critical warning sign for liquidity crises. The persistent negative net assets and shareholders' funds further reveal that the business is technically insolvent—its debts exceed its total assets.

The company has increased its tangible fixed assets, showing some investment in plant and machinery, but this has not translated into improved liquidity or profitability. The cash reserves have halved compared to the previous year, signifying tightening cash flow. The high level of current liabilities, driven partly by an intercompany loan, exacerbates the strain.

Despite being active and operational with a small team, the business is in a precarious financial position. Without corrective measures, it risks further deterioration that could lead to insolvency or forced restructuring.

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4. Recommendations

Immediate Actions:

• Liquidity Management: Focus on improving cash flow by accelerating receivables, negotiating extended terms with suppliers, and reducing discretionary spending.
• Debt Restructuring: Engage with the intercompany lender and other creditors to restructure debts, possibly converting some liabilities into equity or extending repayment terms.
• Cost Control: Review all operating costs; consider workforce optimization, renegotiating leases, and reducing overheads to preserve cash.
• Asset Utilization: Evaluate fixed assets for potential sale or leaseback arrangements to generate immediate cash without disrupting operations.
• Profitability Improvement: Increase focus on revenue-generating activities and pricing strategies to improve gross margins in the hairdressing and beauty treatment sector.

Medium to Long-Term Actions:

• Business Model Review: Assess market positioning and competitive advantages to ensure sustainable revenue streams.
• Financial Monitoring: Implement regular financial health checks and cash flow forecasting to detect issues early.
• Stakeholder Communication: Maintain transparent dialogue with shareholders and lenders about financial status and recovery plans.
• Professional Advice: Seek expert turnaround or insolvency advice if financial conditions worsen.

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Executive Summary

SUNKISSED (MARCH) LTD is currently facing significant financial health challenges, marked by negative working capital and shareholders’ funds indicating insolvency symptoms. Immediate liquidity and cost management actions are critical to stabilise the business and avoid further distress. With prompt intervention and restructuring, the company can improve its financial condition and secure a more sustainable future.