COBEN-DEVELOPMENTS LTD

Executive Summary

Coben Developments Ltd is a newly formed construction business with a modest financial base and minimal net assets. While current liquidity appears sufficient due to a strong cash balance, limited trading history and marginal equity pose risks. Conditional credit approval is recommended, subject to close monitoring of profitability, cash flow, and working capital management to ensure ongoing debt servicing capability.

COBEN-DEVELOPMENTS LTD - Analysis Report

Company Number: 14848693

Analysis Date: 2025-07-29 13:52 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Coben Developments Ltd is a very recently incorporated construction company with limited trading history (incorporated May 2023, first accounts to May 2024). The company shows a positive but minimal net asset position of £389 and positive working capital of £389, supported by a strong cash balance (£172k). However, the current liabilities are substantial (£192k) mainly driven by accruals and deferred income. The lack of significant retained earnings or profitability data (no detailed P&L provided) means the company’s ability to generate sustainable cash flows to meet debt obligations remains unproven. The directors have no adverse records and hold significant control, which is positive. Therefore, credit approval is conditional on monitoring future trading results and cash flow generation to support ongoing liabilities and growth.

2. Financial Strength:
   The balance sheet is very lean, reflecting a micro/small category profile with total assets of £192k and net assets of only £389. The company has negligible fixed assets and relies heavily on current assets, predominantly cash. The large accruals and deferred income (£176k) suggest advance payments or obligations that could impact liquidity if not managed carefully. Shareholders’ funds are minimal at £389, indicating very limited equity buffer to absorb losses. Overall, the financial foundation is fragile but not negative, reflecting the early stage of operations.

3. Cash Flow Assessment:
   Cash at bank is strong relative to total current liabilities, suggesting short-term liquidity is adequate. Debtors are low (£20k), indicating limited sales or credit extended. The near parity of current assets and current liabilities results in a net current asset position of £389, which is technically positive but marginal. The reliance on deferred income and accruals could pressure liquidity if the company’s project pipeline or client payments slow. The company’s ability to convert work in progress or contracts into cash will be critical in maintaining liquidity.

4. Monitoring Points:

• Profit & Loss performance in the next 1-2 years to confirm sustainable profitability and cash generation
• Evolution of current liabilities, especially accruals and deferred income balances
• Cash flow from operations and debtor collection efficiency
• Any capital injections or changes in shareholders’ funds to strengthen equity base
• Directors’ adherence to prudent financial management and prompt filing of accounts and returns
• Market conditions in the domestic building construction sector affecting revenue stability