ALFA SITE SERVICES LIMITED

Risk Rating: LOW The company demonstrates a strong financial position characterized by robust solvency, healthy liquidity, and a consistent history of profitability and asset accumulation over the past decade. Liabilities are contracting, and the company operates with a significant equity buffer. The primary risks are operational rather than financial, stemming from key-person dependency and the inherent volatility of the construction sector.

Key Concerns: - High Debtors Concentration: Debtors stand at £4.28 million, representing approximately 57% of total assets. For a company with only 6 employees, this represents a significant concentration risk. If a major client defaults or delays payment, it could rapidly strain working capital despite the current cash buffer. - Key Person Dependency: The company is tightly controlled by two directors (Stephen and Wendy Burdett), with Mr. Burdett holding over 75% of the shares. The business's continuity and operational execution are highly vulnerable to the health, capacity, and decisions of these two individuals. - Contract and Revenue Volatility: There has been a notable contraction in the balance sheet from 2023 to 2025, with total assets falling from £9.85 million to £7.50 million, driven primarily by a reduction in debtors (from £5.44 million). This suggests the potential conclusion of large contracts. Given the commercial construction sector's nature, maintaining a steady pipeline of work is an ongoing operational risk.

Positive Indicators: - Strong Solvency and Deleveraging: Net assets remain robust at £4.81 million. Furthermore, the company has actively reduced its total liabilities from £4.82 million in 2023 to £2.65 million in 2025, demonstrating a deliberate strategy to de-leverage and reduce financial risk. - Healthy Liquidity: The current ratio stands at approximately 2.3x (£6.14M current assets / £2.65M current liabilities). Cash at bank has increased to £1.59 million, providing a substantial buffer to cover near-term obligations without needing to liquidate assets or rely on debtor collections. - Consistent Profitability and Dividend History: The company has grown its retained earnings consistently over the last decade. The declaration of dividends (£181k in 2025, £199k in 2024) indicates that the company is generating reliable, cash-backed profits sufficient to reward shareholders while retaining sufficient capital for operations. - Regulatory Compliance: The company is up to date with its filing requirements at Companies House, with no overdue accounts or confirmation statements, indicating sound administrative governance.

Due Diligence Notes: - Debtor Quality: An aging analysis of the £4.28 million debtors is essential. Given the size of the debtor book relative to the company's size, identifying the top 5 counterparties and their payment terms is critical to assessing true liquidity risk. - Operational Model Clarification: With only 6 employees and multi-million pound asset bases and debtor books, it is highly likely this company operates as a principal contractor utilizing extensive subcontracting, or functions heavily in plant hire. Verifying the exact business model is necessary to understand margin sustainability and fixed-cost obligations. - PSC Name Discrepancy: The PSC register lists "Mr Stephen Noel Berdett" whereas the director listings show "Stephen Noel Burdett". While this is likely a clerical error, institutional investors should seek confirmation that this is the same individual to ensure clarity on ultimate beneficial ownership. - Future Capital Requirements: The tangible assets note shows significant disposals in the current year (£1.53M cost) alongside £570k of additions. Clarification is required on whether the company is divesting older equipment or scaling down its operational capacity, and what future capital expenditure will be required to remain competitive.