ALTERIORS DESIGN AND BUILD LTD

Executive Summary

Alteriors Design and Build Ltd shows a solid but tightening financial position with improving asset base and liquidity that remains positive. The company benefits from director support and growing current assets, but significant increases in prepayments, accruals, and director loans raise concerns about working capital management. Conditional credit approval is recommended with ongoing monitoring of liquidity, director loans, and payment obligations to mitigate short-term credit risk.

ALTERIORS DESIGN AND BUILD LTD - Analysis Report

Company Number: 12625371

Analysis Date: 2025-07-20 16:10 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Alteriors Design and Build Ltd demonstrates improving financial metrics and a positive trajectory, but there are concerns that require monitoring before unconditional approval. The company maintains positive net current assets and net equity, showing capacity to meet short-term obligations. However, a significant increase in prepayments and directors’ loan accounts within current liabilities in 2024 suggests working capital management should be closely watched. The director’s ongoing financial support is a positive factor, but reliance on this should be considered a risk.

2. Financial Strength:

• Net assets decreased from £37,998 in 2023 to £26,137 in 2024, driven primarily by an increase in current liabilities, especially directors’ loan accounts (£34,190 in 2024 vs none in 2023).
• Fixed assets have increased modestly (£6,591 in 2024 from £5,525 in 2023), reflecting investment in tangible assets such as motor vehicles and tools, which supports operational capacity.
• Share capital remains nominal (£1), indicating a small equity base but consistent with a small private limited company.
• The company’s equity remains positive, though reduced, indicating continued solvency.

3. Cash Flow Assessment:

• Cash at bank reduced from £84,399 in 2023 to £65,540 in 2024 but remains at a healthy level relative to liabilities.
• Current assets rose substantially from £87,878 in 2023 to £140,331 in 2024, driven mainly by a large increase in prepayments (£74,791 in 2024 vs £1,139 in 2023), indicating pre-funded costs or deposits that could impact liquidity if not converted to cash or revenue soon.
• Current liabilities more than doubled to £120,785 in 2024 from £55,405 in 2023, with accruals and directors’ loan accounts showing the largest increases, potentially indicating deferred payments or increased borrowing from the director.
• Net current assets remain positive at £19,546, but have decreased from £32,473, signaling a tightening of short-term liquidity.

4. Monitoring Points:

• Directors’ loan accounts: Monitor the nature, terms, and repayment of the £34,190 liability to the director to assess financial risk.
• Prepayments: Assess the reason for the large increase and its impact on cash flow conversion and working capital cycle.
• Accruals: The sharp rise from £1,750 to £42,716 requires scrutiny to understand underlying obligations and timing of payments.
• Profitability trends: The Profit and Loss reserve decreased, indicating potential reduced profitability or distributions. Further insight into income statement data would be beneficial.
• Continued director support and any changes in business operations or contracts that could affect revenue and cash flow.

Executive Summary