DHR CONTRACTS LIMITED

Executive Summary

DHR Contracts Limited shows weakened financial health with significantly negative working capital and a steep decline in net assets over the last year, raising liquidity concerns. While the business remains active and compliant, credit approval should be conditional on further assurances regarding cash flow and financial support. Close monitoring of liquidity metrics and contract stability is essential to manage credit risk effectively.

DHR CONTRACTS LIMITED - Analysis Report

Company Number: 13555766

Analysis Date: 2025-07-19 12:55 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   DHR Contracts Limited operates in quantity surveying, management consultancy, and property unit trust activities. The company is active and compliant with filings. However, its latest financials show a significant deterioration in liquidity, with net current liabilities worsening from £2,416 in 2023 to £13,029 in 2024. This indicates potential short-term cash flow stress and increased risk in meeting current obligations without additional funding or credit support. The company’s net assets have also decreased sharply from £17,217 to £3,259, reflecting erosion of equity possibly due to operating losses or write-downs. Credit approval should be conditional on obtaining updated cash flow forecasts, confirmation of ongoing contracts, and possibly personal guarantees or collateral to mitigate risk.

2. Financial Strength:
   The balance sheet reveals a small micro-entity with modest fixed assets (£16k) and limited capital base (£3,259 net assets). The sharp increase in current liabilities (from £9,517 to £30,415) far outpaces growth in current assets, resulting in a negative working capital position. This suggests the company is relying heavily on short-term credit or delayed payments from creditors. Shareholders’ funds have decreased significantly, indicating potential losses or withdrawals. Overall financial strength is weak and vulnerable without external support or improved profitability.

3. Cash Flow Assessment:
   The negative net current assets position (-£13,029) highlights liquidity concerns. The company has only £17,387 in current assets, which may include some cash and receivables, but faces liabilities exceeding £30,000 payable within a year. Without detailed cash flow statements, the risk is that the company may struggle to meet immediate obligations unless it secures additional financing or improves receivables collection and cost management. The small workforce (average 2 employees) may help control overheads, but the cash flow profile requires close monitoring.

4. Monitoring Points:

• Monthly cash flow and working capital trends to detect liquidity stress early.
• Receivables aging and creditor payment terms to assess cash conversion cycle.
• Contract pipeline and revenue visibility to confirm ongoing income streams.
• Any additional financing arrangements or shareholder support.
• Changes in director or PSC ownership or indications of financial distress.