CW CONSTRUCTION GROUP LIMITED

Executive Summary

CW Construction Group Limited shows a deteriorating financial position with zero net assets and negative working capital as of January 2024, alongside a significant drop in cash reserves. While the company remains active, its financial fragility and liquidity risk warrant conditional credit approval with enhanced monitoring and safeguards. Close scrutiny of cash flows and debt management is essential to mitigate repayment risk.

CW CONSTRUCTION GROUP LIMITED - Analysis Report

Company Number: 13114038

Analysis Date: 2025-07-20 12:05 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   CW Construction Group Limited is an active private limited company operating in the building completion and finishing sector. The company has a short trading history since incorporation in 2021, with the latest accounts showing a notable deterioration in financial position during the most recent year. The net assets have fallen from £14,750 at 31 January 2023 to zero at 31 January 2024 due to an increase in long-term creditors and a negative net current asset position. Although the company remains operational, the erosion of equity and working capital signals heightened financial risk. Approval for credit facilities should be conditional on enhanced monitoring and possibly guarantees or collateral, given the weakened balance sheet and cash position.

2. Financial Strength:
   The balance sheet as of 31 January 2024 shows fixed assets of £12,055, down from £19,185 the previous year, indicating some asset disposals or impairments. Current assets have decreased significantly, mainly due to cash reducing from £39,543 to £16,259. Debtors are modest at £2,218. Current liabilities stand at £22,079, exceeding current assets of £18,477, resulting in a negative net working capital of -£3,602. Long-term creditors of £8,453 have increased compared to the prior year (£12,778 in 2023 but the net effect was a drop in net assets to zero). The company has no remaining shareholders’ funds, reflecting accumulated losses or increased liabilities. The balance sheet is weak, with limited equity buffer and reliance on creditor financing.

3. Cash Flow Assessment:
   Cash at bank has declined materially by over 50% year-on-year, suggesting cash outflows exceed inflows or capital withdrawals. The negative net current assets position indicates potential liquidity strain to meet short-term obligations. The company has a very small workforce (average 1 employee) which may limit overheads but also scale. The absence of an audit and abridged accounts implies limited financial transparency. Without detailed profit and loss data, cash generation capacity is unclear, but the cash depletion trend and increased liabilities require cautious assessment. Short-term liquidity risk is elevated, and cash flow forecasts should be reviewed before extending credit.

4. Monitoring Points:

• Monthly cash flow statements to track liquidity trends closely.
• Management of current liabilities and efforts to reduce creditor days.
• Changes in long-term debt and creditor composition.
• Profitability and gross margin trends once full accounts or management accounts are available.
• Any director or shareholder injections or guarantees to strengthen equity.
• Contract pipeline and revenue visibility in the construction sector, which can be cyclical.
• Compliance with filing deadlines and transparency in financial reporting to maintain credit confidence.