CONSTRUCTION PLANT COMPETENCE TRAINING LTD

Executive Summary

CONSTRUCTION PLANT COMPETENCE TRAINING LTD is currently experiencing significant financial distress marked by a sharp increase in liabilities and negative net assets, threatening its short-term liquidity and overall viability. Immediate cash flow management, cost control, and strategic asset assessment are critical to stabilizing the business and preventing insolvency. With prompt corrective action, the company can work towards restoring financial health.

CONSTRUCTION PLANT COMPETENCE TRAINING LTD - Analysis Report

Company Number: 13888148

Analysis Date: 2025-07-29 21:01 UTC

Financial Health Assessment for CONSTRUCTION PLANT COMPETENCE TRAINING LTD

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1. Financial Health Score: D

Explanation:
The company shows significant signs of financial distress in its latest financial year (ending Feb 2025) with net liabilities and negative working capital, which are critical red flags for a small business. While the previous two years showed modest positive net assets and working capital, the sudden deterioration indicates emerging or ongoing financial difficulties. This score reflects a need for urgent attention to restore financial stability.

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2. Key Vital Signs

Metric	2025 (£)	2024 (£)	Interpretation
Fixed Assets	33,319	0	Acquisition of fixed assets suggests investment but may have strained cash.
Current Assets	7,837	4,275	Slight increase, but still low absolute value.
Current Liabilities	60,320	736	Dramatic increase in short-term liabilities — major warning sign.
Net Current Assets	-52,483	3,539	Negative working capital indicates liquidity crunch.
Total Assets Less Current Liabilities	-19,164	3,539	Negative net assets show insolvency at balance sheet level.
Net Assets (Shareholders' Funds)	-19,914	2,789	Equity erosion; owner’s stake wiped out, signaling financial distress.
Average Number of Employees	1	1	Small team consistent with micro-entity status.

Interpretation of Vital Signs:

• Negative Working Capital: The company’s current liabilities exceed current assets by a wide margin. This means it may struggle to meet short-term obligations—a symptom of liquidity distress.
• Negative Net Assets: The company is effectively insolvent on a balance sheet basis, where total liabilities exceed total assets. This is a critical symptom of financial health deterioration.
• Fixed Asset Increase: The acquisition of £33,319 in fixed assets may indicate investment or capital expenditure, but likely funded through increased liabilities rather than cash reserves, worsening liquidity.
• Stable Small Workforce: The headcount remains steady, implying no immediate downsizing but may limit operational capacity to generate cash flow.

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3. Diagnosis

The company is exhibiting symptoms of financial distress primarily driven by a sharp increase in current liabilities without corresponding growth in current assets or cash reserves. This liquidity strain results in negative working capital, which is a classic sign that the business may face difficulties in meeting its short-term debts and operational expenses. The negative net assets further confirm a weakened financial position, indicating the company’s obligations exceed its asset base.

The sudden jump in liabilities—from £736 in 2024 to £60,320 in 2025—could suggest accrued debts, delayed payments, or possibly increased borrowings to fund fixed asset acquisition or operational needs. The company’s cash position is not explicitly stated but inferred to be minimal, increasing the risk of cash flow problems.

This financial profile resembles a patient with "heart failure" where the company's "circulatory system" (cash flow and liquidity) is compromised, threatening its survival unless corrective measures are taken.

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4. Recommendations

Immediate Action Plan to Stabilize Financial Health:

1. Cash Flow Management:

   • Conduct a detailed cash flow forecast to identify timing mismatches and critical payment obligations.
   • Prioritize clearing or restructuring short-term liabilities to reduce pressure on liquidity.
   • Seek short-term financing or overdraft facilities if necessary to maintain day-to-day operations.

2. Cost Control and Expense Review:

   • Review all operational costs and halt or defer non-essential expenditures.
   • Consider negotiating payment terms with suppliers and creditors to improve working capital.

3. Asset Utilization:

   • Evaluate the fixed assets acquired (£33k) for their contribution to revenue generation.
   • If non-essential or underutilized, consider asset disposal or leasing options to generate cash.

4. Revenue Enhancement:

   • Intensify sales and marketing efforts in core education and training services to boost turnover.
   • Explore additional revenue streams aligned with company expertise or industry demand.

5. Director Involvement and Oversight:

   • Director Babatunde Adewale, as sole significant controller, should actively oversee financial restructuring.
   • Engage professional financial advisory or turnaround specialists to assist with restructuring plans.

6. Monitor Financial Reporting:

   • Ensure timely and accurate financial reporting to track improvements and detect further symptoms early.

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