Company Number: SC684247

Analysis Date: 2025-07-29 19:37 UTC

1. Credit Opinion: APPROVE with conditions

CWP Leith Limited has demonstrated a remarkable turnaround in its financial position between 2023 and 2024, shifting from a negative net current asset position (-£14,269) and negative shareholders funds (-£16,419) to a strong positive net current assets position (£7.32 million) and positive shareholders funds (£777,170) as of September 2024. This rapid improvement suggests recent successful project developments or asset acquisitions consistent with its SIC code (Development of building projects). However, the micro-entity status and short trading history (incorporated Dec 2020) mean the financial track record is limited. Approval is recommended subject to ongoing monitoring of project completion and cash flow consistency.

2. Financial Strength:

• The company’s balance sheet as of 30 September 2024 shows current assets of £7.61 million against current liabilities of £295k, yielding strong net working capital of £7.32 million.
• Shareholders funds have turned positive at £777k, indicating equity backing.
• The balance sheet improvement is primarily driven by a large accrual/deferred income figure (£6.54 million), which may represent unearned revenue or advanced payments on projects.
• Historical negative equity and net current liabilities in prior years reflect early-stage investment phases but have now been corrected.
• The company carries minimal share capital (£1), typical for small private companies.

3. Cash Flow Assessment:

• The strong net current asset position and large current asset base indicate good short-term liquidity.
• Current liabilities are low (£295k), suggesting manageable near-term obligations.
• The large accruals and deferred income balance signals significant incoming cash flow yet to be recognized as revenue, supporting future liquidity.
• Absence of audit and micro-entity status mean detailed cash flow statements are unavailable, so cash flow projections should be requested.
• Working capital appears robust, reducing risk of liquidity stress.

4. Monitoring Points:

• Confirm nature and collectability of accruals and deferred income balance to ensure it converts to cash.
• Monitor project progress and contract performance given industry risks in building development.
• Track ongoing profitability and cash flow generation in future accounts to confirm sustainability.
• Watch for timely filing of next accounts and confirmation statements to maintain compliance.
• Review director conduct and company status for any changes that might affect credit risk.
• Ensure no material changes in liabilities or contingent liabilities arise.