DAWSON & DEACON JOINERS & CONTRACTORS LTD

Executive Summary

Dawson & Deacon Joiners & Contractors Ltd has shown a marked improvement in its financial health in 2023, with strong liquidity and net asset growth indicating recovery and operational expansion. While the company enjoys a robust short-term financial position, ongoing attention to debt management and profitability monitoring is essential to sustain this positive trajectory. Overall, the business is in a stable and strengthening financial condition with promising prospects if current prudent financial management continues.

DAWSON & DEACON JOINERS & CONTRACTORS LTD - Analysis Report

Company Number: SC683250

Analysis Date: 2025-07-29 19:24 UTC

Financial Health Assessment for Dawson & Deacon Joiners & Contractors Ltd (SC683250)
Assessment Date: Based on accounts as of 31 December 2023

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1. Financial Health Score: B

Explanation:
The company demonstrates a solid recovery and strengthening of its financial position in the most recent financial year. Key liquidity and solvency indicators have improved markedly compared to previous years, suggesting healthier operational and financial stability. However, as a micro-entity with limited capital and modest asset base, some caution remains until consistent profitability and cash flow can be confirmed over several years.

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2. Key Vital Signs

Metric	2023 (£)	2022 (£)	Interpretation
Fixed Assets	38,321	27,101	Investment in long-term assets is increasing, indicating growth or reinvestment in tools/equipment.
Current Assets	223,514	85,998	Strong increase in liquid and short-term assets, indicating improved cash and receivables.
Current Liabilities	146,659	112,068	Current obligations have risen but remain manageable relative to current assets.
Net Current Assets (Working Capital)	79,711	-26,070	Positive working capital shows healthy short-term financial "pulse" with sufficient liquid resources to cover debts due within a year.
Net Assets (Equity)	57,857	581	Substantial improvement from near breakeven net asset position to a strong equity base.
Share Capital	10	10	Minimal share capital typical of micro-entities, equity growth mainly from retained earnings.
Average Number of Employees	6	4	Growth in workforce suggests business expansion and increased activity.

Interpretation of Vital Signs:

• The jump from a negative to a positive working capital is akin to a patient's blood pressure normalizing after a period of hypertension — the company now has a healthier buffer to meet short-term obligations.
• The net asset base increase can be seen as strengthened bones and muscles supporting the company's structure, enhancing resilience.
• The increase in fixed assets and employees signals investment and operational expansion, reflecting vitality and growth potential.

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3. Diagnosis

Underlying Business Health:

• The company, classified as micro, is showing clear signs of recovery and strengthening after a challenging prior year.
• The sudden improvement in liquidity (current assets vs. current liabilities) suggests either better cash management, increased sales, or improved receivables collection.
• Positive net assets indicate accumulated retained profits or asset revaluation, implying good management of resources.
• The low share capital is typical of small companies but means reliance is on operational profits to build equity.
• The rise in employee count supports a growing business workload and potential for increased revenue streams.
• No signs of distress such as overdue filings, negative net assets, or insolvency markers are present.
• The business operates in the joinery and building finishing sector (SIC: 43320, 43390), which can be capital and labour intensive but shows signs of steady growth here.

Symptoms of Concern:

• The company still carries significant current liabilities, which must be monitored to avoid liquidity crunches despite improved working capital.
• The micro-entity exemption means profit and loss details are not disclosed, limiting insight into profitability trends and cash flow.
• The long-term creditors remain high (£60,175), needing management to ensure sustainable debt servicing.

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4. Recommendations

1. Maintain Healthy Cash Flow:
   Continue to monitor receivables closely to prevent cash flow "blockages". Healthy cash flow is the lifeblood of the company, ensuring ongoing operational vitality.

2. Debt Management:
   Plan to reduce current and long-term liabilities prudently. Consider restructuring any high-interest debts or negotiating terms to ease pressure on working capital.

3. Profitability Tracking:
   Though exempt from filing P&L accounts, internally track profitability and margins rigorously to ensure the business is not only asset-rich but profit-healthy.

4. Investment in Growth:
   With increasing fixed assets and employees, ensure investments align with revenue growth forecasts to avoid overextension—a healthy balance between expansion and financial strength is crucial.

5. Contingency Planning:
   Prepare for industry cyclicality or economic downturns by building cash reserves or access to credit facilities, to maintain stability in turbulent times.

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Executive Summary