TONY DONNELLAN PROPERTIES LTD

Executive Summary

TONY DONNELLAN PROPERTIES LTD is a newly established property management company with substantial fixed assets but facing liquidity challenges. Current liabilities significantly exceed liquid assets, resulting in negative working capital and limited financial flexibility. Immediate action is recommended to improve cash flow and working capital management to stabilize financial health and support future growth.

TONY DONNELLAN PROPERTIES LTD - Analysis Report

Company Number: 14671112

Analysis Date: 2025-07-29 18:03 UTC

Financial Health Assessment for TONY DONNELLAN PROPERTIES LTD

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1. Financial Health Score: D

Explanation:
The company exhibits significant liquidity stress, with a negative working capital and very limited current assets relative to short-term liabilities. While it holds substantial fixed assets, these are not readily convertible to cash to meet immediate obligations. The minimal net asset base and reliance on long-term creditors indicate early-stage financial fragility typical of a newly incorporated property management entity.

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2. Key Vital Signs

Metric	Value	Interpretation
Fixed Assets	£753,773	Healthy tangible asset base, indicating investment in property assets.
Current Assets (Cash only)	£5,105	Very low liquidity buffer; cash available is minimal for operations.
Current Liabilities	£441,678	High short-term debt obligations, a critical concern for cash flow.
Net Current Assets (Working Capital)	-£436,573	Negative working capital, showing symptoms of liquidity distress.
Total Net Assets	£13,000	Minimal equity, indicating a very thin capital buffer.
Shareholders' Funds	£13,000	Same as net assets; low capitalisation relative to liabilities.
Debt due after one year	£304,200	Significant long-term liabilities, adding financial leverage risk.
Company Age	1 year (incorporated Feb 2023)	Early life stage, limited operational history available.

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3. Diagnosis

The financial "vital signs" reveal a nascent company with substantial fixed asset investment but limited liquid resources to cover immediate debts. The negative net current assets (working capital) are a clear symptom of cash flow pressure, as current liabilities far exceed current assets. This suggests the company may face challenges meeting its short-term obligations without additional financing or asset sales.

The equity base is minimal (£13,000), which places the company in a vulnerable position if asset values fluctuate or if operational losses occur. The significant long-term creditors (£304,200) imply reliance on external financing, which may be manageable if the company can generate stable cash flows from property management activities.

Given the business operates in real estate management and property ownership, the fixed assets represent its core operational base. However, the inability to show profitability (profit & loss account not filed) and the short operating history limit the confidence in financial sustainability.

Overall, the company is in a financially fragile state with symptoms of liquidity distress but with potential upside if the property assets generate steady income and if the working capital situation improves.

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4. Recommendations

1. Improve Liquidity:

   • Secure additional short-term financing or capital injections to cover current liabilities.
   • Explore options to accelerate receivables or reduce payables to ease cash flow pressure.

2. Working Capital Management:

   • Negotiate extended payment terms with creditors to reduce current liabilities.
   • Maintain a cash reserve to cover operational needs and unexpected expenses.

3. Profitability and Reporting:

   • Start preparing and filing the profit & loss account to provide transparency on operational performance.
   • Monitor income streams from property management closely to ensure positive cash generation.

4. Asset Utilization:

   • Consider leveraging fixed assets through refinancing or sale and leaseback arrangements if cash flow issues persist.
   • Regularly value property assets to understand the true capital position.

5. Governance and Planning:

   • Develop a detailed financial forecast and cash flow budget for the next 12-24 months.
   • Engage with financial advisors to plan debt restructuring if necessary.

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