DAVIES & KING LIMITED

Executive Summary

Davies & King Limited operates as a micro-entity in the UK domestic construction sector, showing a positive turnaround in net assets in 2024 after previous losses. While benefiting from flexibility typical of small firms, it faces sector-wide challenges such as cost inflation and regulatory demands. Its financial scale and asset base position it as a niche player, with growth dependent on managing working capital and market conditions effectively.

DAVIES & KING LIMITED - Analysis Report

Company Number: 12763328

Analysis Date: 2025-07-29 12:43 UTC

1. Industry Classification
   Davies & King Limited operates within the construction sector, specifically classified under SIC code 41202 — Construction of domestic buildings. This sub-sector primarily involves building residential properties, including new housing developments and renovations. Key characteristics of this sector include high dependency on economic cycles, demand influenced by housing market trends, regulatory compliance (building codes, environmental standards), and a competitive landscape dominated by small to medium-sized firms alongside large construction groups.

2. Relative Performance
   As a micro-entity, Davies & King Limited’s financial scale is modest, with a share capital of only £2 and an average of 2 employees. Its net assets improved significantly from a negative £10,237 in 2023 to a positive £3,927 in 2024, indicating a turnaround in financial stability. Current assets increased to £115,122 in 2024 with a net working capital of £2,721, improving liquidity compared to the previous year's net current liabilities of £9,282. Fixed assets are minimal (£741), typical for micro businesses that may subcontract or lease equipment rather than owning substantial physical assets. Compared to typical micro-construction firms, Davies & King’s recovery from a negative equity position is positive, though absolute asset values remain low. Profitability and revenue data are not disclosed, limiting deeper margin analysis.

3. Sector Trends Impact
   The UK residential construction market faces several dynamics affecting companies like Davies & King Limited. Post-pandemic recovery and government housing initiatives have supported demand, but inflationary pressures on materials and labour costs have squeezed margins across the sector. Rising interest rates may dampen buyer demand, affecting new build projects. Sustainability and energy efficiency regulations are increasingly shaping project specifications, requiring adaptability and investment in skills. Small players often face challenges in negotiating supply chain contracts and accessing finance, but a niche focus on bespoke or local domestic projects can insulate from large-scale market fluctuations.

4. Competitive Positioning
   Davies & King Limited appears to be a niche micro-entity player within the domestic construction market. Strengths include a recent recovery in net asset position and operational continuity since incorporation in 2020, suggesting resilience. The company’s small scale may allow flexibility and close client relationships, beneficial in bespoke residential construction. However, weaknesses include limited asset base and scale, which restrict growth potential and ability to absorb market shocks. The company’s financials reflect typical constraints of micro firms in construction: tight working capital, reliance on short-term project cash flows, and vulnerability to payment cycles. Compared to medium and larger competitors, Davies & King lacks economies of scale, broader service offerings, and potentially professional accreditations or certifications that enhance competitiveness.