Company Number: 13910921

Analysis Date: 2025-07-29 20:24 UTC

1. Credit Opinion: CONDITIONAL APPROVAL

Alunia Construction Ltd is a young company incorporated in 2022, operating in specialised construction activities. It shows positive net assets and working capital, indicating a basic ability to meet short-term obligations. However, the declining net assets from £31,011 in 2023 to £23,009 in 2024 and reduced current assets raise concerns about financial stability and cash flow trajectory. The company is small, and its accounts are unaudited and abridged, limiting transparency. The director, Mr Daniel Paine, owns a controlling stake and the company has no signs of insolvency proceedings. Credit approval is recommended with conditions such as obtaining updated management accounts and monitoring cash flow closely.

2. Financial Strength:

• Net Assets decreased by approximately 26% from £31,011 to £23,009 year on year.
• Fixed assets increased modestly, but accumulated depreciation is high relative to asset additions.
• Current assets reduced from £55,193 to £34,333, mostly due to a sharp decline in debtors (£47,141 to £25,705).
• Current liabilities also decreased from £29,732 to £17,342, maintaining positive net current assets (£16,991).
• Shareholders’ funds remain positive (£22,909), showing retained earnings, but the drop signals reduced profitability or possible write-downs.
• The company falls under the Small company category and has complied with filing deadlines.

3. Cash Flow Assessment:

• Cash at bank is modest at £8,628 but stable compared to prior year.
• Debtors have significantly decreased, potentially indicating improved collections or reduced sales.
• Positive net current assets imply sufficient liquidity to cover short-term liabilities.
• However, the reduction in current assets and net assets suggests tightening working capital.
• The company has 3 employees, indicating low overhead but also limited operational scale.
• The limited disclosure on profit and loss (abridged accounts) restricts detailed cash flow analysis.

4. Monitoring Points:

• Monitor turnover and profitability trends via interim management accounts to detect any further erosion.
• Watch debtor ageing closely to avoid liquidity strain.
• Track cash balances monthly to ensure ongoing liquidity.
• Review any changes in directors or ownership that may impact governance or financial stability.
• Assess contract pipeline and client concentration in the specialised construction sector, which can be sensitive to economic cycles.
• Confirm no late filings or accounting irregularities arise.