ABBEY EXTENSIONS & RENOVATIONS LTD

Executive Summary

Abbey Extensions & Renovations Ltd shows a positive financial trend with improving net assets and liquidity, supporting short-term debt servicing capability. The company’s balance sheet is healthy for a micro-sized construction business, but attention is needed on current liabilities and cash flow management. Approval is recommended with ongoing monitoring of working capital and debt levels to ensure sustained financial resilience.

ABBEY EXTENSIONS & RENOVATIONS LTD - Analysis Report

Company Number: 12639702

Analysis Date: 2025-07-20 16:18 UTC

1. Credit Opinion: APPROVE with conditions
   Abbey Extensions & Renovations Ltd demonstrates a positive financial trajectory with improving net assets and net current assets over the last two years, indicating growing financial stability. The company operates within the micro category, limiting exposure, and shows no overdue filings or signs of financial distress. However, the presence of long-term creditors and relatively modest fixed assets requires monitoring. Approval is recommended subject to periodic review of liquidity and debt servicing capacity given the industry’s capital intensity and potential cash flow volatility.

2. Financial Strength:
   The balance sheet as at 31 March 2024 shows net assets of £42,763, up from £29,685 the previous year, reflecting retained earnings and business growth. Fixed assets decreased from £48,985 to £36,738, but current assets more than doubled to £170,076, improving working capital. Current liabilities rose to £131,477, but net current assets remain positive at £38,599, indicating the company can meet short-term obligations. Long-term liabilities reduced from £37,102 to £27,824, which lowers gearing risk. Overall, the financial position is sound for a micro entity in construction with adequate equity buffer.

3. Cash Flow Assessment:
   The company maintains a healthy liquidity position with net current assets of £38,599, an improvement from prior years, implying sufficient working capital to fund ongoing operations. The increase in current assets, primarily cash or receivables, supports short-term cash flow needs. However, the relatively high current liabilities warrant attention to payment terms and collection efficiency. The small workforce (2 employees) suggests low overheads, benefiting cash preservation. No audit was performed, so underlying cash flow quality should be verified via management accounts.

4. Monitoring Points:

• Monitor current liabilities and creditor payment terms to avoid liquidity strain.
• Track cash conversion cycle closely, especially in a construction segment where project payments can be irregular.
• Watch for changes in fixed asset investment as this impacts depreciation and future capital needs.
• Review any increases in long-term debt to ensure sustainable leverage.
• Keep an eye on director and shareholder changes and their impact on company control and financial decisions.