ABSOLUTE PLUMBING AND HEATING NE LTD

Executive Summary

ABSOLUTE PLUMBING AND HEATING NE LTD is currently in a fragile financial state with minimal equity and tight liquidity, indicating a high risk of financial distress. Immediate actions to strengthen capital, improve cash flow management, and optimize operations are critical to stabilizing the business and ensuring future viability. Without intervention, the prognosis remains poor given the current financial indicators.

ABSOLUTE PLUMBING AND HEATING NE LTD - Analysis Report

Company Number: 13481361

Analysis Date: 2025-07-29 18:13 UTC

Financial Health Assessment for ABSOLUTE PLUMBING AND HEATING NE LTD (as of 30 June 2024)

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1. Financial Health Score: D

Explanation:
The company’s financial metrics reveal symptoms of distress, with a dangerously low net asset base (£30) and a declining asset position over recent years. This score reflects concerns about liquidity and capital adequacy, indicating an unhealthy financial state requiring immediate attention.

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2. Key Vital Signs:

Metric	2024 Value (£)	Interpretation
Fixed Assets	6,440	Declined from £11,449 in 2021, indicating potential asset disposals or depreciation.
Current Assets	5,050	Reduced from previous years, showing weakening short-term asset strength.
Current Liabilities	4,702	Slightly decreased but still high relative to current assets.
Net Current Assets	348	Positive but very thin working capital buffer, indicating tight liquidity.
Creditors (due after 1 year)	6,758	Significant long-term liabilities, representing a financial burden.
Net Assets	30	Critically low equity; almost at zero, indicating near insolvency.
Shareholders Funds	30	Reflects minimal invested capital and retained earnings.
Average Number of Employees	1	Very small operation, possibly limiting revenue generation capacity.

Interpretation of Vital Signs:

• Healthy cash flow is suggested by positive net current assets, but the margin is razor-thin (£348). This is a fragile state and gives little room for error.
• Symptoms of distress include a steep decline in net assets over three years: from £215 in 2022/23 to just £30 in 2024, signaling sustained losses or asset write-downs.
• The high level of creditors falling due after one year (£6,758) compared to net assets implies potential solvency pressure and financial leverage that could impair future operations.
• The company’s micro-entity size and minimal workforce suggest limited operational scale and resources.

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3. Diagnosis:

ABSOLUTE PLUMBING AND HEATING NE LTD exhibits classic symptoms of financial frailty. The company’s equity base has nearly eroded, and the shrinking fixed and current assets point to a business struggling to maintain its asset base and liquidity. The minimal positive working capital is a “weak pulse”, indicating the company can meet short-term liabilities but with very little cushion. Long-term liabilities exceed net assets by a large margin, which is a “warning sign” of potential insolvency risk.

The small size and limited resources reduce the company’s ability to absorb shocks or invest in growth. The resignation of one director in 2023 may also suggest internal changes that could impact strategic direction or governance.

Overall, the financial health is poor, with high risk of distress if not managed carefully.

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4. Recommendations:

To improve financial wellness and stabilize the company’s health, consider the following actions:

• Strengthen Capital Base: Infuse additional equity or secured financing to rebuild net assets and improve solvency. This is akin to administering a vital injection to stabilize the patient’s condition.
• Improve Liquidity Management: Tighten control over receivables and payables to increase net current assets and build a more comfortable liquidity buffer. Consider renegotiating payment terms with creditors.
• Asset Management: Review fixed assets for underutilization or disposals that could generate cash without harming core operations.
• Cost Control and Revenue Growth: With only one employee, the business may be under-resourced; investing wisely in operations or marketing could help increase turnover and profitability.
• Governance and Strategy: Ensure strong leadership and clear strategic plans are in place to address ongoing financial challenges and restore confidence among stakeholders.
• Regular Monitoring: Implement monthly financial reviews focusing on cash flow and key ratios to detect early signs of distress and allow timely interventions.

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