DEVLINS SCAFFOLDING LTD

Executive Summary

DEVLINS SCAFFOLDING LTD shows clear signs of financial strain characterized by negative working capital and equity, sustained largely through director funding. Immediate actions to improve liquidity, restore capital, and comply with filing obligations are critical to stabilizing the company’s financial health. Without intervention, the company risks ongoing solvency challenges.

DEVLINS SCAFFOLDING LTD - Analysis Report

Company Number: 12819982

Analysis Date: 2025-07-20 16:46 UTC

Financial Health Assessment for DEVLINS SCAFFOLDING LTD

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1. Financial Health Score: D

Explanation:
The company exhibits signs of financial distress primarily due to negative net current assets and shareholders' funds, indicating more immediate liabilities than assets. The micro-entity scale and limited operational history exacerbate risk, though the director’s significant control and advances suggest some ongoing support. The overdue filing status for accounts also reflects potential administrative strain.

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2. Key Vital Signs:

Metric	Value (£)	Interpretation
Fixed Assets	49,957	Reasonable investment in long-term assets, likely scaffolding equipment. Healthy sign.
Current Assets	8,921	Low level of liquid or short-term assets, indicating limited operational cash or receivables.
Current Liabilities	62,067	High short-term debts, significantly exceeding current assets. A symptom of liquidity stress.
Net Current Assets	-53,146	Negative working capital; company may struggle to meet short-term obligations.
Total Assets less CL	-3,189	Overall asset base less current liabilities is negative, indicating potential insolvency risks.
Shareholders Funds	-3,189	Negative equity; company is technically insolvent on a balance sheet basis.
Director’s Advances	£90,635 credited, £29,348 repaid	Indicates reliance on director funding to support operations.
Average Employees	1	Very small workforce; limited operational scale.
Overdue Accounts Filing	Yes	Administrative compliance risk; may attract penalties and reduce stakeholder confidence.

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3. Diagnosis:

The company’s financial "vital signs" indicate symptoms of financial distress. While fixed assets are present representing scaffolding equipment, the significant negative net current assets point to liquidity problems — the company owes substantially more shortly than it can cover with its current assets. The negative shareholders’ funds highlight that liabilities exceed the total assets, a classic "balance sheet insolvency" symptom.

The director’s advances suggest the company is currently sustained through personal funding, which is common in small start-ups but not a sustainable long-term strategy. The micro-entity status and minimal staff underline a very lean operation but also limit capacity to generate increased turnover or absorb shocks.

The overdue accounts filing is a procedural "fever" that could signal operational pressure or management distraction, potentially leading to regulatory penalties or loss of creditor confidence.

Overall, the company's financial health can be likened to a patient with low blood pressure (liquidity) and weakened immune system (negative equity), requiring urgent intervention to restore financial vitality.

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4. Recommendations:

1. Improve Liquidity Management:

   • Prioritize collection of receivables and reduce short-term liabilities where possible.
   • Negotiate extended credit terms with suppliers to ease cash flow pressure.
   • Consider short-term financing options to cover immediate obligations without jeopardizing equity.

2. Strengthen Capital Base:

   • Explore capital injections from the director or external investors to restore positive equity.
   • Review business model to increase revenue streams and profitability to rebuild reserves.

3. Administrative Compliance:

   • File overdue accounts immediately to avoid penalties and demonstrate regulatory compliance.
   • Implement robust internal controls for timely financial reporting going forward.

4. Operational Efficiency:

   • Assess cost structure and identify areas for cost reduction without impairing service quality.
   • Given the single employee count, consider scalability plans carefully to avoid overextension.

5. Strategic Review:

   • Director should undertake a full financial and operational review to diagnose root causes of distress.
   • Consider professional advice for turnaround strategy if cash flow issues persist.

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