THE CYCLADIC WINE AND SPIRITS COMPANY LIMITED

Executive Summary

THE CYCLADIC WINE AND SPIRITS COMPANY LIMITED shows clear signs of financial strain, with growing short-term liabilities exceeding current assets and persistent negative equity. While current assets have increased, liabilities have grown faster, leading to worsening working capital deficits. Immediate action is needed to improve liquidity, restructure capital, and control costs to restore financial health and ensure the company’s sustainability.

THE CYCLADIC WINE AND SPIRITS COMPANY LIMITED - Analysis Report

Company Number: 13623324

Analysis Date: 2025-07-20 15:19 UTC

Financial Health Assessment: THE CYCLADIC WINE AND SPIRITS COMPANY LIMITED

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1. Financial Health Score: D

Explanation:
The company is showing clear symptoms of financial distress, with persistent negative net assets and net current liabilities over the last three years. Although it is still active and filing on time, the balance sheet reveals a "sick patient" with a weak capital base and ongoing working capital shortages, which could impair operational flexibility and long-term viability.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	591,479	318,340	Healthy increase in liquid and short-term assets, potentially indicating growth or better cash management.
Current Liabilities	645,076	346,542	Significant and growing short-term debts, outpacing current assets, a symptom of liquidity strain.
Net Current Assets	(53,597)	(28,202)	Negative working capital indicates the company owes more than it owns in the short term, a red flag.
Net Assets (Shareholders' Funds)	(56,597)	(31,202)	Negative equity shows the company’s liabilities exceed assets, indicating an erosion of capital and potential solvency issues.
Average Employees	0	0	No staff employed, possibly indicating outsourcing or early-stage development.

Additional Context:

• The company qualifies as a micro-entity, simplifying reporting but also reflecting smaller scale operations.
• The company is engaged in "Manufacture of wine from grape" (SIC 11020), a sector typically requiring significant working capital for production cycles.
• Three separate corporate entities control 25-50% each, evidencing a shared ownership structure but no single controlling party.
• No audit required, accounts prepared under micro-entity provisions, so limited detail on profitability and cash flows.

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3. Diagnosis

Symptoms Analysis:

• The company exhibits classic symptoms of financial distress: growing current liabilities outpacing current assets, negative working capital, and persistent negative net assets.
• Although current assets nearly doubled in 2024, liabilities grew even more sharply, worsening liquidity strain and indicating reliance on short-term credit or deferred payments.
• Negative shareholders’ funds reflect accumulated losses or capital erosion, a warning sign for solvency and investor confidence.
• No employees suggest the company may be outsourcing production or in a very early stage, which could mean limited operational activity or cost control focus.
• The company is still active, submitting timely filings, which is a positive sign of management commitment.

Underlying Health:

• The "patient" struggles with balancing short-term obligations and asset availability, indicating a liquidity squeeze.
• Negative equity implies long-term capital insufficiency, risking the ability to raise funds or secure credit.
• The absence of an audit and detailed P&L information limits assessment of profitability trends, though the balance sheet paints a cautious picture.

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4. Recommendations

To improve financial wellness and stabilize the company:

1. Improve Cash Flow Management:

   • Accelerate receivables collection and manage payables strategically to reduce current liabilities pressure.
   • Consider negotiating extended payment terms with suppliers or accessing short-term financing with favorable terms.

2. Capital Injection or Debt Restructuring:

   • Explore equity infusion from existing shareholders or external investors to shore up negative net assets and restore solvency.
   • Alternatively, restructure existing debts to reduce short-term liabilities or convert some debt to longer-term arrangements.

3. Cost Control and Operational Efficiency:

   • Review operational model given zero employees; ensure outsourced activities align with cash flow capabilities and do not increase liabilities.
   • Implement strict budget controls to prevent further erosion of equity.

4. Strategic Business Review:

   • Assess business model viability in light of financial constraints — consider scaling back or pivoting to reduce capital intensity.
   • Engage with financial advisors for a turnaround plan, possibly including scenario planning for cash flow and funding.

5. Maintain Compliance and Transparency:

   • Continue timely filing of accounts and confirmation statements to preserve company standing and stakeholder confidence.
   • Prepare for potential audit if size or risk profile changes, to provide greater assurance to investors and creditors.

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