CRAIGHEAD LTD

Executive Summary

Craighead Ltd is a micro-entity with improving financial strength, positive working capital, and a stable management structure. The company shows adequate liquidity and balance sheet resilience to support credit facilities, subject to ongoing monitoring of cash flow and debtor management. Conditional approval is recommended, focusing on maintaining current asset quality and adherence to filing and governance standards.

CRAIGHEAD LTD - Analysis Report

Company Number: 12547492

Analysis Date: 2025-07-20 17:48 UTC

1. Credit Opinion: APPROVE with conditions

Craighead Ltd demonstrates a stable and improving financial position over recent years, with net assets more than doubling from £21.6k in 2023 to £44.9k in 2024. The company maintains positive net current assets (£28.7k) indicating adequate short-term liquidity to cover current liabilities. The business operates in management consultancy (SIC 70229), a sector with moderate risk but manageable cash flow patterns. The director has maintained compliance with filing requirements, and there are no adverse director conduct records or insolvency indicators. However, given the micro entity size and relatively modest capital base (£100 share capital), approval should be conditional on monitoring cash flow stability and ensuring no material deterioration in working capital.

2. Financial Strength:

The balance sheet is healthy for a micro entity, showing growth in fixed assets (£16.2k vs £8.4k prior year) and a strong increase in net assets from £21.6k to £44.9k. Current assets decreased from £156.3k to £122.9k but remain well above current liabilities of £94.2k, preserving positive working capital. The increase in net current assets (£28.7k) signals improving liquidity. Shareholders’ funds reflect retained earnings, evidencing profitability or capital injections. The company remains small and low-leveraged with no indication of long-term debt, supporting financial resilience.

3. Cash Flow Assessment:

Net current assets of £28.7k indicate sufficient short-term liquidity. The reduction in current assets compared to prior year should be investigated to confirm it is not due to increased receivables or stock aging. Operating cash generation appears adequate to cover short-term obligations given the positive working capital and no reported overdrafts or short-term borrowings. The company employs one staff member, indicating a lean cost base supporting steady cash flow. Overall cash flow risk is low but should be monitored for any sudden changes in debtor collection or creditor payment patterns.

4. Monitoring Points:

• Track current assets composition (debtors vs cash) to ensure receivables remain collectible.
• Monitor net current assets quarterly to detect any liquidity tightening early.
• Watch for any changes in director or management that could affect governance.
• Review annual accounts for profitability trends and any increase in liabilities.
• Confirm continued timely filing of accounts and confirmation statements.