BFF CONSTRUCT LTD

Executive Summary

BFF CONSTRUCT LTD shows improving net asset growth and a strong working capital position with minimal current liabilities, supporting its ability to meet short-term debts. However, low cash reserves relative to debtors highlight a risk in cash flow conversion, requiring ongoing monitoring. Credit approval is feasible with conditions focused on liquidity management and debtor collection efficiency.

BFF CONSTRUCT LTD - Analysis Report

Company Number: 12816172

Analysis Date: 2025-07-20 11:24 UTC

1. Credit Opinion: APPROVE with conditions
   BFF CONSTRUCT LTD demonstrates a stable and improving net asset position with modest liabilities, indicating a capacity to meet short-term obligations. The company operates in a specialised construction segment with consistent current asset levels and low current liabilities. However, cash balances are low relative to debtors, and the company relies heavily on receivables turning into cash. Approval for credit is recommended with monitoring of cash flow and debtor collection efficiency to mitigate liquidity risk.

2. Financial Strength:
   The company’s net assets increased from £7,068 in 2020 to £15,218 in 2023, showing a positive equity growth trajectory. Shareholders’ funds mirror net assets, indicating no hidden liabilities. Current liabilities have decreased significantly from £67,361 in 2020 to £557 in 2023, improving the working capital position. The balance sheet reflects a low fixed asset base (not explicitly stated but implied by total exemption accounts), typical for a service-oriented construction business. Overall, the financial structure appears sound for its size, with low gearing risk.

3. Cash Flow Assessment:
   The company’s cash at bank dropped from £6,522 in 2020 to £477 in 2023, despite stable debtor balances (£15,298 in 2023). This suggests potential issues in converting receivables to cash timely, which could strain liquidity. Net current assets are strong (£15,218) due to low current liabilities (£557), but the cash buffer is thin. Working capital is positive, but cash flow management warrants close scrutiny. The company has only one employee, suggesting limited payroll pressure and fixed costs.

4. Monitoring Points:

• Debtor days and ageing profile: ensure receivables are collected promptly to maintain liquidity.
• Cash flow trends: monitor monthly cash balances against short-term liabilities.
• Contract profitability: assess margin sustainability in the specialised construction sector.
• Director’s financial stewardship: given sole director status, monitor for any changes in management or PSC that could impact governance.