CLONALLON CONTRACTS LTD

Executive Summary

Clonallon Contracts Ltd has shown strong growth in profitability and net asset value, supported by effective financial management and professional oversight. The company’s balance sheet is healthy with solid working capital, though it carries notable finance lease liabilities and provisions to monitor. Overall, the company appears creditworthy with a capacity to service debt, subject to ongoing cash flow and risk management.

CLONALLON CONTRACTS LTD - Analysis Report

Company Number: NI688318

Analysis Date: 2025-07-29 12:51 UTC

1. Credit Opinion: APPROVE
   Clonallon Contracts Ltd demonstrates a solid and improving financial position with a significant increase in profitability and net assets over the last year. The company is active, with no overdue filings, and has a director with relevant professional qualifications (Chartered Accountant), which supports sound financial stewardship. The growing gross profit and operating profit margins, alongside positive retained earnings, indicate a healthy ability to service debt obligations. However, attention should be given to relatively high long-term liabilities and provisions, suggesting some contingent risks.

2. Financial Strength:
   The company’s net assets have grown substantially from £15.3k in 2024 to £214.2k in 2025, reflecting a strong equity base. Tangible fixed assets increased to £517k, mainly financed by hire purchase and finance leases, which are material components of the capital structure. Current assets of £494k comfortably cover current liabilities of £316k, resulting in a strong net current asset position (£178.8k). Despite this, long-term creditors (£353k) and provisions (£128.6k) remain significant, indicating the company carries considerable medium to long-term obligations. Overall, the balance sheet shows strengthening but with moderate gearing from finance leases.

3. Cash Flow Assessment:
   Cash and cash equivalents of £58.6k have improved slightly year on year, but represent a modest buffer compared to total liabilities. Debtors have increased substantially, which may reflect growing sales but also requires monitoring for collection efficiency. Stocks have also increased, tying up working capital. Positive net current assets and rising profitability suggest the company has adequate liquidity to meet short-term obligations, but working capital management will be important to maintain cash flow stability, especially given the company’s expansion and asset financing.

4. Monitoring Points:

• Monitor the collection period on debtors to ensure cash conversion remains timely as sales grow.
• Watch the development of provisions and long-term liabilities to assess any emerging risks or contingent liabilities.
• Review ongoing profitability and administrative expenses to sustain operating margins.
• Track cash flow closely, particularly the impact of increased stockholding and asset financing on liquidity.
• Keep an eye on compliance with filing deadlines and any changes to director appointments or control.