Company Number: 12840129

Analysis Date: 2025-07-20 12:06 UTC

1. Risk Rating: LOW
   AVR Construction Ltd demonstrates strong liquidity and solvency metrics with substantial net current assets and positive net assets. The company is compliant with filing deadlines and maintains an active status without any indications of financial distress.

2. Key Concerns:

• Decline in Debtors: There is a significant decrease in reported debtors from £120,200 in 2023 to £1,136 in 2024, which could indicate changes in credit policy or revenue recognition that require clarification.
• Reduced Net Assets: Net assets decreased from £350,340 in 2023 to £317,253 in 2024, suggesting a slight contraction in equity that merits review of profitability and reserves.
• Single Director and Employee: The company operates with only one director and one employee (who is also the director), which may raise governance and operational continuity concerns.

3. Positive Indicators:

• Strong Liquidity Position: Cash balances remain high (£316,518 in 2024), comfortably covering current liabilities (£19,601), yielding a robust net current asset position (£298,053).
• Compliance with Filings: Accounts and confirmation statements are up to date, indicating good regulatory compliance and corporate governance discipline.
• Stable Shareholder Funds: Despite a moderate decrease, shareholder funds remain healthy at over £300k, indicating ongoing capital support.

4. Due Diligence Notes:

• Investigate the nature and reason for the substantial reduction in debtor balances between 2023 and 2024 to understand cash flow implications and revenue recognition changes.
• Review profit and loss reserves and any underlying operational results to assess the cause of the drop in net assets.
• Assess the implications of having a sole director and employee on operational risk and succession planning.
• Confirm absence of any director disqualifications or regulatory issues given the limited management team.
• Verify the tangible fixed asset additions and depreciation accounting, as the company reported £19,200 in fixed assets in 2024 compared to none in 2023.