ALEX EVAN HEATING AND PLUMBING LIMITED

Executive Summary

Alex Evan Heating and Plumbing Limited shows early signs of financial improvement but remains a small, capital-light business with negative working capital and limited cash reserves. Credit approval is recommended on a conditional basis with close monitoring of liquidity and tax obligations. The company’s growth trajectory and sole director control warrant continued oversight to mitigate credit risk.

ALEX EVAN HEATING AND PLUMBING LIMITED - Analysis Report

Company Number: 14358352

Analysis Date: 2025-07-29 18:46 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Alex Evan Heating and Plumbing Limited is a recently established company (incorporated in 2022) operating in the plumbing and heating installation sector. The company shows improving financial metrics with net assets increasing from £691 in 2023 to £2,565 in 2024. However, it currently reports net current liabilities (£692 deficit in 2024) and limited cash reserves (£1,122). The director is the sole significant controller, indicating centralized management control but also concentration risk. Given the small scale, limited operating history, and working capital deficiency, credit approval should be conditional on ongoing monitoring and potentially limiting credit exposure to short-term facilities or invoice financing.

2. Financial Strength:
   The balance sheet shows modest fixed assets (£3,257), primarily tools and motor vehicles, which supports operational capacity. Shareholders' funds have increased notably, reflecting retained profits accumulation (£2,555 in profit and loss reserves). Despite this, the company continues to carry net current liabilities, though reduced from prior years. The increase in net assets signals some financial improvement and capital retention. However, the balance sheet remains thin, with low liquidity and no significant buffer for shocks.

3. Cash Flow Assessment:
   Cash balances improved from £116 to £1,122 year on year, but remain low relative to current liabilities of £1,814, resulting in negative working capital. The company employs only one person, limiting fixed overheads. However, the tax and social security creditor of £1,592 is a substantial part of short-term liabilities and may require careful management to avoid liquidity stress. Cash flow appears tight, necessitating prudent working capital management and possibly external finance to meet obligations comfortably.

4. Monitoring Points:

• Liquidity ratios: Monitor current ratio and quick ratio trends quarterly to detect worsening working capital.
• Profitability: Track turnover growth and net margin developments to ensure sustainable earnings.
• Tax liabilities: Watch for accumulation or clearance of tax and social security payables to prevent enforcement action.
• Director stability: Given sole director control, observe any changes in management or governance that could impact operational continuity.
• Credit terms: Review debtor days and creditor terms closely to avoid cash flow mismatches.