ALLIED DEVELOPMENT SCOTLAND LIMITED

Executive Summary

Allied Development Scotland Limited shows steady financial improvement with a solid liquidity position and growing net assets, supporting its ability to meet current liabilities. While fixed asset values have declined, working capital has strengthened, reducing financial risk. Approval is recommended with ongoing monitoring of cash flow, creditor management, and operational performance to mitigate emerging risks.

ALLIED DEVELOPMENT SCOTLAND LIMITED - Analysis Report

Company Number: SC686606

Analysis Date: 2025-07-29 16:16 UTC

1. Credit Opinion: APPROVE with Conditions
   Allied Development Scotland Limited demonstrates improving financial stability and adequate liquidity to meet short-term obligations. The company is active and has filed accounts and confirmation statements timely, indicating compliance and governance. However, the directors’ professions (carpenter and heating engineers) hint at a modest management background in finance or corporate governance, so ongoing monitoring is advised. The company’s net assets have increased from £88.8k to £96.8k, showing a positive trajectory, but fixed assets have decreased, which could reflect asset disposals or depreciation outpacing investment. The current liabilities have significantly decreased from £117k to £66k, improving working capital. Approval is recommended with conditions to monitor cash flow and creditor levels closely.

2. Financial Strength: Moderate and Improving
   The company’s balance sheet shows a net asset base of £96.8k as of January 2025, up from £88.8k the prior year, reflecting retained earnings growth. Tangible fixed assets declined from £64.1k to £48.1k, possibly due to depreciation or asset sales, which slightly reduces collateral value. Current assets have decreased but remain strong at £115.2k, largely supported by a healthy cash balance (£109.7k). Current liabilities have nearly halved to £66.5k, improving net current assets to £48.7k from £24.7k. Overall, shareholders’ funds are stable, but the limited share capital (£3) indicates reliance on retained profits rather than equity injection.

3. Cash Flow Assessment: Satisfactory Liquidity
   Cash reserves remain robust at £109.7k, providing good liquidity to cover current liabilities (£66.5k), resulting in a current ratio greater than 1.7 times, which indicates sound short-term financial health. Debtors are low (£5.5k), reducing risk of receivables collection issues. The reduction in creditors and directors’ loan accounts (from £31.5k to £3.1k) suggests improved creditor management and reduced reliance on director funding. Working capital remains positive and has improved year-over-year, supporting operational flexibility.

4. Monitoring Points:

• Track ongoing cash flow and creditor levels to ensure continued ability to meet obligations without increasing short-term debt.
• Monitor fixed asset levels and any major disposals or capital expenditures impacting future earnings capacity.
• Review management’s capability to manage growth and financial complexity given limited financial expertise.
• Watch for any delayed filings or changes in director status that might impact governance or compliance.
• Verify the quality and timing of project revenues given the company's SIC code (building project development), as project delays could affect cash flow.