WRAPPED UP HOLDINGS LTD

Executive Summary

WRAPPED UP HOLDINGS LTD shows significant signs of financial distress, with a sharp decline in liquidity and shareholder equity between 2023 and 2024. The company’s current financial state is fragile, indicating urgent need for liquidity management and balance sheet strengthening to avoid further deterioration. Immediate financial and operational review is recommended to stabilize and improve the company’s financial health.

WRAPPED UP HOLDINGS LTD - Analysis Report

Company Number: NI682552

Analysis Date: 2025-07-29 14:33 UTC

Financial Health Assessment for WRAPPED UP HOLDINGS LTD as at 30 April 2024

---

1. Financial Health Score: D

Explanation:
The company’s financial health shows serious symptoms of distress. Key metrics have deteriorated markedly compared to previous years, including a drastic reduction in current assets and net assets. The company’s net assets have fallen from £10,814 in 2023 to just £612 in 2024, indicating a severe depletion of financial resources. This score reflects a fragile financial condition with potential risks to ongoing viability unless corrective actions are taken.

---

2. Key Vital Signs

Metric	2024 Value	2023 Value	Interpretation
Current Assets	£1,250	£11,125	Sharp drop signals poor liquidity ("drying up of cash reserves").
Net Current Assets (Working Capital)	£250	£10,500	Near exhaustion of working capital; limited ability to cover short-term debts.
Net Assets (Equity)	£612	£10,814	Substantial erosion of shareholder equity ("weakened heart of the balance sheet").
Debtors	£0	£10,875	Complete loss of receivables, possibly indicating write-offs or asset disposal.
Creditors (short-term liabilities)	£1,000	£625	Increased short-term obligations adding to liquidity strain.
Provisions for liabilities	£162	£114	Rising provisions could signal anticipated future costs or risks.

Additional Context:

• The company operates as a holding company (SIC 64209) and holds a small investment valued at £200.
• No employees besides the director, suggesting a lean operation but possibly limited operational activity.
• No audit required as per small companies exemption.

---

3. Diagnosis

The company is exhibiting clear symptoms of financial distress:

• Liquidity Crisis: The drastic fall in current assets and net current assets signifies a critically low level of liquid resources needed to meet immediate obligations. This "weak pulse" in cash and equivalents is concerning for day-to-day survival.
• Asset Depletion: The disappearance of debtors from the balance sheet coupled with a rise in creditors suggests the company may have lost receivables and is relying more on short-term credit, a sign of strain.
• Equity Erosion: The steep decline in net assets points to accumulated losses or asset write-downs, reflecting a "weakening backbone" and reduced financial cushion.
• Provisions Increase: Growing provisions for liabilities might indicate anticipated expenses or risks that could further impact the financial health.
• Going Concern Uncertainty: Though accounts are prepared on a going concern basis, the financial "vital signs" suggest that without intervention, the company may struggle to sustain operations.

Overall, these findings reflect a business at risk, with urgent need for financial stabilisation.

---

4. Recommendations

To improve financial wellness and restore "healthy circulation" in the company’s finances, consider the following interventions:

1. Liquidity Management:

   • Secure short-term financing or capital injections to shore up cash reserves.
   • Review and accelerate collection of any outstanding receivables (if applicable).
   • Negotiate extended payment terms with creditors to ease immediate cash flow pressure.

2. Cost Control and Operational Review:

   • Conduct a thorough review of operational expenses and reduce non-essential costs.
   • Evaluate the performance of underlying investments and holdings to identify any value to unlock or restructure.

3. Balance Sheet Strengthening:

   • Consider capital raising options, such as equity infusion by shareholders or related parties, to rebuild net assets.
   • Explore asset sales if non-core or underperforming assets exist.

4. Risk Management:

   • Address provisions by clarifying the nature of liabilities and planning for their settlement to avoid surprises.
   • Implement regular financial monitoring to detect early warning signs and prevent further deterioration.

5. Professional Advice:

   • Engage financial and insolvency advisors promptly to explore restructuring options and ensure compliance with director duties in times of financial distress.

---