CLEGG&SON SCAFFOLDING LIMITED

Executive Summary

Clegg&Son Scaffolding Limited shows signs of financial distress with persistent negative working capital and heavy reliance on director loans, despite operational profitability and compliance with filing requirements. The sharp decline in net assets due to dividend payments raises concerns about capital adequacy and liquidity. Further investigation into cash flow management and director funding arrangements is recommended before considering investment.

CLEGG&SON SCAFFOLDING LIMITED - Analysis Report

Company Number: 12412068

Analysis Date: 2025-07-29 20:32 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity risks, evidenced by persistent negative net current assets and high director loan balances. The reduction in net assets over the most recent year and the dependence on director financing highlight financial fragility.

2. Key Concerns:

• Negative Working Capital: The net current liabilities have consistently worsened, reaching -£37,770 in the latest year, indicating difficulty meeting short-term obligations.
• High Director Loans: £43,672 owed to directors forms a substantial portion of current liabilities, risking withdrawal of support and signaling reliance on insider funding.
• Declining Net Assets: Net assets fell sharply from £16,820 (2023) to £3,702 (2024), driven by dividend payments exceeding profits, which may impair capital adequacy.

3. Positive Indicators:

• Tangible Fixed Assets: The company holds £51,200 in net tangible assets, supporting operational capability in scaffolding services.
• No Overdue Filings: Accounts and confirmation statements are up to date, demonstrating regulatory compliance and governance.
• Profitability in 2024: The reported profit of £18,882 indicates operational profitability despite cash flow challenges.

4. Due Diligence Notes:

• Investigate the sustainability and terms of director loans and the likelihood of continued financial support.
• Assess cash flow forecasts and debtor collectability given the reduction in trade debtors and cash balances.
• Review dividend policy rationale given the payment of £32,000 dividends amid declining equity and negative working capital.
• Examine potential contingent liabilities or off-balance sheet risks not visible in current filings.