DAIRAK FINISHING LTD

Executive Summary

DAIRAK FINISHING LTD exhibits a weak financial position with negative net assets and significantly increased liabilities as of the latest accounts. Liquidity is constrained, and operational scale appears minimal, undermining its ability to service debt. Credit facilities are not recommended without substantial improvement or guarantees.

DAIRAK FINISHING LTD - Analysis Report

Company Number: 13002869

Analysis Date: 2025-07-20 13:42 UTC

1. Credit Opinion: DECLINE
   DAIRAK FINISHING LTD’s latest financials show a significant deterioration in financial position, with net liabilities of £23,965 as of 30 November 2024, compared to net assets of £7,274 in the prior year. The sharp increase in creditors due beyond one year (£31,836 in 2024 vs. £8,634 in 2023) raises concerns over long-term solvency and potential cash flow stress. The absence of employees and reliance on a sole director controlling 100% of shares further concentrates risk. Given the negative equity, weak liquidity, and lack of profitability information, extending credit without substantial mitigating factors is not advisable at this stage.

2. Financial Strength:
   The company is classified as a micro-entity and operates in construction (domestic and commercial buildings). The balance sheet reveals negative net assets of £23,965 in 2024, down from positive equity of £7,274 in 2023. Current assets decreased by over 50% to £7,871 while current liabilities increased to £31,836, resulting in an apparent mismatch in working capital. The long-term creditors have increased markedly, suggesting reliance on external financing or delayed supplier payments. Share capital remains nominal (£80), and the company reports no employees in the latest period, indicating minimal operational scale.

3. Cash Flow Assessment:
   Current assets of £7,871 against current liabilities of £31,836 indicate a liquidity shortfall and insufficient working capital to meet short-term obligations. The absence of a profit and loss statement limits visibility on operational cash generation, but the negative net assets and increased creditor balances imply cash flow constraints. The director’s sole control and lack of external equity injection raise concerns about the company’s ability to access additional funding rapidly. No audit or detailed financial notes were provided, limiting transparency.

4. Monitoring Points:

• Track changes in net assets and creditor balances in subsequent filings to detect recovery or further deterioration.
• Monitor any updates regarding director or shareholder funding injections or restructuring plans.
• Watch for employee count changes as a proxy for operational scale and business activity.
• Review upcoming confirmation statement and accounts filings for timely submission and consistency.
• Assess external economic or industry factors impacting construction demand and payment cycles.