DAVID HOWELLS BUILDERS LTD

Executive Summary

David Howells Builders Ltd has demonstrated notable financial recovery and strengthening in the latest year, recovering from prior working capital deficits to establish a positive liquidity position and significantly boosted net assets. The company shows signs of healthy cash flow and improved capital structure, though remains a small-scale operation with inherent risks associated with size and concentration. With continued prudent management of cash flow, credit, and operational resilience, the company’s financial outlook is positive.

DAVID HOWELLS BUILDERS LTD - Analysis Report

Company Number: 12834752

Analysis Date: 2025-07-20 15:41 UTC

Financial Health Assessment Report for DAVID HOWELLS BUILDERS LTD

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1. Financial Health Score: B

Explanation:
The company demonstrates a solid improvement in key financial metrics in the latest financial year, reflecting recovery from previous working capital strains and a strengthening balance sheet. While current asset management and liquidity show positive signs of health, the company is still relatively young and small in scale, with modest fixed assets and limited diversification, which tempers the overall score.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	41,155	Stable investment in long-term assets; indicates some asset base supporting operations.
Current Assets	98,848	Strong increase from prior year; suggests improved cash, receivables, or inventory position.
Current Liabilities	94,792	Increased, but manageable relative to current assets.
Net Current Assets	4,056	Positive working capital; "healthy cash flow" symptom indicating ability to cover short-term debts.
Total Assets less Current Liabilities	45,211	Reflects overall net asset position excluding short-term debts; substantial improvement.
Creditors after 1 Year	1,353	Low long-term liabilities; limited financial burden beyond 12 months.
Net Assets (Shareholders’ Funds)	43,685	Equity growth from £3,896 in 2023 to £43,685 in 2024; strong capital strengthening.
Share Capital	1.00	Minimal share capital typical of micro-entities; equity primarily from retained earnings.
Employees	1	Small operational scale; potential vulnerability to single-person dependency.

Additional observations:

• The company successfully turned around a prior working capital deficit (-£30,145 in 2023) to a positive net current asset position in 2024, a key "reversal of distress symptoms."
• No overdue filings or compliance issues, indicating good governance and regulatory health.
• Ownership and control are consolidated with one individual, leading to streamlined decision-making but also concentration risk.

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3. Diagnosis

What the Financial Data Reveals About Business Health

• Liquidity & Solvency: The company exhibits a healthy liquidity position in 2024, having overcome previous years of negative working capital. This suggests improved operational cash flow and possibly better credit control or payment terms negotiated with suppliers and clients. The low level of long-term creditors further supports financial stability.

• Capital Structure: The significant increase in net assets signals accumulation of retained earnings or additional capital injection, enhancing the company’s buffer against financial shocks. The minimal share capital is typical of a micro-entity and not a concern given the equity growth.

• Operational Scale & Risk: With only one employee (the director) and a micro account category, the company is small and potentially vulnerable to operational disruptions, but this is common for startups and sole trader-led limited companies.

• Asset Management: Fixed assets have remained stable, suggesting no recent large capital expenditures or asset disposals. The large jump in current assets may indicate higher cash reserves, receivables, or stock levels, which should be monitored for efficiency.

• Growth & Sustainability: The financials reflect early-stage growth and improved profitability or cash retention, but scale remains limited. The company must maintain "healthy cash flow" and avoid overextending credit or stock to sustain this trajectory.

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4. Recommendations

To improve and maintain financial wellness, consider the following actions:

• Cash Flow Monitoring: Maintain rigorous monitoring of cash inflows and outflows to sustain positive working capital. Establish cash flow forecasts and stress tests to anticipate potential liquidity crunches.

• Credit Control: Implement or strengthen credit management policies to reduce risk of bad debts and ensure receivables convert timely to cash.

• Diversification & Growth: Explore opportunities to diversify customer base or service offerings to reduce dependency on limited contracts or clients. This will improve revenue stability.

• Operational Resilience: Consider incremental staff additions or outsourcing key functions to reduce operational risks tied to single-person dependency.

• Asset Utilization: Review current asset components to ensure efficient use of resources, avoiding unnecessary stockpiling or tied-up funds in receivables.

• Capital Planning: While equity base is growing, consider prudent reinvestment of profits to support sustainable growth or to build cash reserves for unforeseen expenses.

• Compliance Vigilance: Continue timely filing of accounts and confirmation statements to avoid penalties and maintain good standing.

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