BERKHAMSTED BUILDING SOLUTIONS LIMITED

Executive Summary

Berkhamsted Building Solutions Limited shows significant financial stress with negative net assets and high debt levels relative to assets, creating heightened solvency and liquidity risks. Although the company maintains compliance with filing requirements and has substantial work in progress, its minimal cash reserves and young operational history raise concerns about sustainability without continued director support and effective cash management. Further due diligence on asset quality and debt obligations is recommended.

BERKHAMSTED BUILDING SOLUTIONS LIMITED - Analysis Report

Company Number: 13557336

Analysis Date: 2025-07-20 15:48 UTC

1. Risk Rating: HIGH
   The company exhibits a negative net asset position combined with significant long-term liabilities, indicating solvency concerns. The minimal cash balance against large current liabilities suggests liquidity risks. The business is very young with limited operational history, increasing uncertainty on sustainability.

2. Key Concerns:

• Negative shareholders’ funds (£-81,806) and net liabilities reflect an undercapitalized balance sheet, raising solvency risk.
• Large bank loans (£543,851 long-term and £278,278 current) relative to total assets signal high gearing and potential repayment challenges.
• Very low cash balance (£304) despite substantial current liabilities (£457,274) indicates potential liquidity constraints, dependent on timely collection of work in progress (£909,556).

3. Positive Indicators:

• The company is active with timely filings and no overdue accounts or confirmation statements, suggesting compliance with statutory requirements.
• Work in progress stock is significant (£909,556), indicating active contract activity and potential for future cash inflows.
• The director has pledged financial support and affirmed going concern status, which may provide short-term backing.

4. Due Diligence Notes:

• Verify the nature and collectability of work in progress stock and debtors to assess true liquidity position.
• Review terms and covenants of the bank loans to understand repayment schedules and refinancing risks.
• Investigate the directors’ loan account (£106,368) for repayment terms and potential impact on cash flow.
• Assess the background and experience of the director(s), particularly given recent changes in appointments and resignations.
• Confirm no outstanding regulatory or legal issues beyond the data provided.