B7 CONSTRUCTION LTD

Executive Summary

B7 CONSTRUCTION LTD is a small, micro-entity construction business showing a recovery from prior financial distress with positive net assets and working capital. While liquidity appears adequate for current obligations, the company’s limited scale and past volatility warrant cautious credit extension with conditions and close monitoring. The director’s sole control presents governance risk that must be considered in ongoing assessments.

B7 CONSTRUCTION LTD - Analysis Report

Company Number: 12569490

Analysis Date: 2025-07-20 13:10 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   B7 CONSTRUCTION LTD demonstrates modest net assets and positive working capital, indicating a baseline ability to meet short-term obligations. However, the company is a micro-entity with limited financial scale and a recent history of volatility, including a prior year with net liabilities and negative equity. The single director holds full control, which concentrates governance risk. Loan approval is recommended with conditions—such as limits on facility size and periodic financial reviews—to mitigate credit risk until a more stable financial trend is established.

2. Financial Strength:
   The most recent balance sheet (year ending 30 April 2024) shows net assets of £16,086, down from £24,904 the prior year but a recovery from a negative net asset position (£-27,693) in 2021. Current assets stand at £56,445 against current liabilities of £40,359, resulting in positive net current assets (working capital) of £16,086. The micro classification confirms small operational scale. The company's capital base is limited (share capital £1.00), implying reliance on retained earnings and creditors. The absence of fixed assets data suggests minimal investment in long-term assets, consistent with a start-up or early-stage construction business.

3. Cash Flow Assessment:
   Current assets predominantly consist of short-term receivables and cash equivalents, while current liabilities mainly include trade creditors and accrued expenses. Positive net current assets indicate liquidity is adequate to cover immediate liabilities. However, the sharp decline in current assets from £129,875 (2023) to £56,445 (2024) signals potential cash generation or collection issues, warranting monitoring. The company employs only 2 staff, limiting payroll burden but also indicating limited operational scale. No off-balance sheet liabilities were disclosed, reducing hidden risk.

4. Monitoring Points:

• Quarterly review of cash flow and debtor collections to ensure liquidity remains sufficient.
• Watch for any increase in current liabilities or deterioration in net current assets.
• Monitor profitability trends and accumulation of retained earnings to strengthen equity.
• Review director’s credit and legal status regularly given his sole control and governance concentration.
• Assess impact of economic conditions on domestic construction demand affecting revenue stability.