CLAIRGLOW HEATING LIMITED
Company number 01260716 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Credit Assessment: CLAIRGLOW HEATING LIMITED
1. Credit Opinion: APPROVE
Clairglow Heating Limited presents a strong credit profile. The company demonstrates robust balance sheet strength with net assets of £2.1M, excellent liquidity coverage, and a near-49-year trading history in the heating and mechanical installation sector. Leverage is minimal, and the business has generated consistent retained profits. The modest profit trajectory and rising debtor book warrant standard monitoring, but there are no material credit concerns. A conventional credit facility would be well-supported by the company's financial position.
2. Financial Strength
Balance Sheet Summary (Year Ending 31 August 2025)
| Metric | 2025 | 2024 | Movement |
|---|---|---|---|
| Total Assets | £2,984,544 | £2,999,772 | -0.5% |
| Net Assets | £2,112,020 | £2,053,257 | +2.9% |
| Shareholders' Funds | £2,112,020 | £2,053,257 | +2.9% |
| Retained Earnings | £2,111,920 | £2,053,157 | +2.9% |
Key Observations:
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Strong Equity Position: Net assets exceed £2.1M, representing a substantial buffer for creditors. The business is equity-funded to an exceptional degree, with only £100 share capital but £2.1M accumulated retained earnings — evidence of long-term, consistent profitability and conservative dividend policy.
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Low Leverage: Total liabilities (£988k including long-term creditors and provisions) against equity of £2.1M yields a debt-to-equity ratio of approximately 0.47:1. This is highly conservative and well within acceptable parameters for the sector.
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Asset Composition: The asset base is heavily weighted toward current assets (£2.98M of £2.98M total). Tangible fixed assets are modest at £115,699, suggesting the business is not capital-intensive and operates on a labour/contract model typical of installation businesses.
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Net Asset Growth: Net assets grew by £58,763 (2.9%), indicating profitable trading, though the margin appears modest relative to the balance sheet scale.
3. Cash Flow Assessment
Liquidity Position
| Metric | 2025 | 2024 |
|---|---|---|
| Current Assets | £2,984,544 | £2,999,772 |
| Current Liabilities | £937,945 | £993,425 |
| Net Current Assets | £2,046,599 | £2,006,347 |
| Current Ratio | 3.18x | 3.02x |
| Quick Ratio (excl. stock) | 2.79x | 2.65x |
| Cash at Bank | £690,779 | £868,703 |
Working Capital Analysis:
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Excellent Liquidity: A current ratio of 3.18x and quick ratio of 2.79x are exceptionally strong. The business has more than sufficient current asset coverage to meet near-term obligations.
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Debtors: Debtors increased from £1,757,823 to £1,927,623 (+£169,800 or +9.7%). This is the largest balance sheet item and warrants attention. Without turnover figures, it is difficult to calculate debtor days, but the increase could reflect either revenue growth or slower collections. This should be clarified with management.
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Cash Reduction: Cash decreased by £177,924 year-on-year. However, this coincides with capital expenditure on plant and machinery (£82,289 additions) and appears to fund working capital growth rather than operational distress. The remaining cash balance of £690,779 remains substantial.
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Trade Creditors: Current liabilities decreased from £993,425 to £937,945, suggesting the company is managing supplier obligations effectively and not stretching terms.
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Overdraft Facility: The accounts confirm access to an annually renewed overdraft facility (next renewal July 2026), providing additional liquidity headroom. The directors state this has been renewed successfully for a number of years.
4. Monitoring Points
| Area | Metric | Rationale |
|---|---|---|
| Debtors | Debtor days / ageing report | £1.93M debtor book is significant; monitor for collection deterioration. Request monthly debtor ageing. |
| Cash Flow | Cash conversion trends | Profit appears modest relative to balance sheet; monitor operational cash generation vs. reported profit. |
| Revenue | Turnover and margin trends | Small company accounts do not disclose P&L; request management accounts to assess revenue trajectory and profitability. |
| Provisions | Nature of provisions (£21,188) | Provisions increased from £8,409; understand composition (likely contractual or warranty). |
| Long-term Liabilities | HP/lease commitments (£29,090) | Modest but growing; monitor for further capital commitments. |
| Employee Count | Headcount stability | Reduced from 48 to 47; monitor for labour retention issues in a skill-short sector. |
| Overdraft Renewal | Facility confirmation | Confirm renewal post-July 2026; though low risk given track record. |
Sector Context
The company operates in plumbing, heating, and mechanical installation (SIC 43220, 33200, 43210). This sector benefits from ongoing demand for maintenance and regulatory compliance work (e.g., gas safety, energy efficiency), providing recession-resistant revenue streams. However, the sector is labour-constrained, and the company's modest employee base of 47 staff suggests reliance on key personnel.