BLUE BOX DEVELOPMENTS LIMITED

Executive Summary

Blue Box Developments Ltd demonstrates improving short-term liquidity with positive net current assets but remains technically insolvent with negative equity. Its micro-entity scale and recent director resignation suggest credit should be cautiously extended with close monitoring of cash flow, equity, and deferred income. Overall, conditional approval is recommended with restrictions on exposure size and ongoing review.

BLUE BOX DEVELOPMENTS LIMITED - Analysis Report

Company Number: 13438443

Analysis Date: 2025-07-20 17:18 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Blue Box Developments Limited shows improving liquidity and working capital but remains a micro-entity with net liabilities and negative shareholders’ funds. The company’s current assets exceed current liabilities by £53,898 as of June 2024, a positive change from prior years, indicating better short-term debt servicing capacity. However, net liabilities (£3,038) and negative equity reflect accumulated losses or funding deficits, implying limited financial buffer. Given the nature of the construction development sector and the small scale of operations (no employees reported), credit exposure should be limited or structured with covenants and monitoring, especially since one director recently resigned.

2. Financial Strength:

• Fixed assets are negligible (£1), indicating minimal investment in long-term resources.
• Current assets increased significantly from £145,552 in 2023 to £227,964 in 2024, driven likely by cash or receivables.
• Current liabilities also increased but were outpaced by current assets, improving net current assets from a negative £998 to a positive £53,898.
• Accruals and deferred income rose sharply to £56,937, which may represent deferred revenue or accrued expenses that require scrutiny.
• The company remains technically insolvent on a net assets basis (£-3,038), but the gap is small, possibly reflecting timing differences or early stage losses.
• Share capital is minimal (£2), indicating limited equity funding.

3. Cash Flow Assessment:

• The large positive net current assets suggest the company currently has adequate short-term liquidity.
• The absence of employees implies low operating overheads, reducing cash burn risk.
• However, no detailed cash flow statement is available, so the sustainability of cash flows cannot be fully assessed.
• The increase in accruals/deferred income may require monitoring as it could impact cash flow timing.
• The negative shareholders’ funds highlight a reliance on external funding or director loans which should be verified.

4. Monitoring Points:

• Track the company’s net assets and equity position to ensure it moves into positive territory.
• Monitor cash balances and receivables closely to confirm liquidity improvements are maintained.
• Review the nature and timing of accruals and deferred income to assess risk of future cash outflows.
• Watch for changes in director appointments or ownership which could affect governance and financial stewardship.
• Evaluate progress on development projects and revenue recognition given the sector’s cyclical risk.