APB CONTRACTS LTD

Executive Summary

APB Contracts Ltd is currently in a weak financial position with negative net assets and significant liquidity strain. Cash reserves have fallen sharply, and working capital is deeply negative, raising serious concerns about short-term payment capability. Without material improvement or external support, the company does not meet prudent credit risk criteria and is unsuitable for credit extension at this time.

APB CONTRACTS LTD - Analysis Report

Company Number: 13016793

Analysis Date: 2025-07-20 12:14 UTC

1. Credit Opinion: DECLINE

APB Contracts Ltd shows a deteriorating financial position with net liabilities increasing sharply from a positive net asset position of £2,940 in 2023 to net liabilities of £4,387 in 2024. The negative working capital position worsened from -£400 to -£7,059, indicating significant short-term liquidity stress. Cash reserves have fallen substantially from £6,365 to £1,332, impairing the company’s ability to meet immediate obligations. The limited share capital (£1) and sole director/shareholder structure increase concentration risk. Given the current financial weakness, lack of strong equity backing, and absence of clear evidence of recovery or growth, the company is not considered creditworthy for new or increased credit facilities without substantial additional security or guarantees.

2. Financial Strength:

The balance sheet reveals an erosion of financial strength over the last year. Tangible fixed assets decreased slightly but remain modest at £2,672. Current liabilities rose to £8,391, while current assets barely cover £1,332 in cash and negligible other current assets, resulting in a significant negative net current asset position. Shareholders’ funds swung from positive £2,940 to negative £4,388, indicating accumulated losses and insolvency on an accounting basis. The company’s capital structure is weak with minimal share capital and no evidence of recent capital injection. This raises concerns about the company’s solvency and capacity to absorb future losses or shocks.

3. Cash Flow Assessment:

The cash at bank reduced significantly by almost 80% year-on-year, from £6,365 to £1,332, signaling cash flow difficulties or increased cash burn. Negative working capital points to strained liquidity, suggesting the company may struggle to pay suppliers and short-term creditors on time. The absence of detailed profit and loss data limits assessment of operating cash flow generation, but the balance sheet trends imply operating losses or cash outflows. The single director’s trade as a joiner may limit the company’s ability to diversify or scale revenue quickly. Overall, liquidity risk is high, with elevated risk of payment delays or default.

4. Monitoring Points:

• Track monthly cash balances and working capital fluctuations to detect worsening liquidity.
• Monitor creditors aging and payment performance to identify early signs of financial distress.
• Review any capital injections or shareholder support to restore net asset value.
• Assess turnover and profitability trends when accounts are next available to evaluate recovery prospects.
• Observe director’s conduct and any related-party transactions for governance concerns.
• Watch for overdue filings or adverse changes in company status as early warning signs.