DMP GARDENING SERVICES LTD

Executive Summary

DMP Gardening Services Ltd is an early-stage private company with improving but still constrained financial strength. The company faces liquidity challenges reflected in negative working capital and reliance on hire purchase financing. Conditional credit approval is recommended, contingent on ongoing monitoring of cash flow and director backing to ensure the company can meet its obligations.

DMP GARDENING SERVICES LTD - Analysis Report

Company Number: 12686887

Analysis Date: 2025-07-29 20:24 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   DMP Gardening Services Ltd shows a mixed credit profile. The company remains active and compliant with filings, but the financials reveal persistent working capital deficits and modest net asset growth. The director’s personal control and commitment to support the company mitigate risk to some extent. However, the reliance on hire purchase financing and current liabilities exceeding current assets raise concerns about short-term liquidity. Approval is recommended subject to monitoring cash flow closely and ensuring continued director support.

2. Financial Strength:

• Net assets have increased from £429 in 2023 to £3,683 in 2024, indicating some improvement in equity base.
• Fixed assets rose significantly to £26,817, funded partly by hire purchase contracts (£14,460 net book value), increasing long-term liabilities (£5,831 due after one year).
• Current liabilities (£67,783) exceed current assets (£51,006), resulting in a net current liability of £16,777, which deteriorated from the previous year’s slight deficit (£1,724).
• The balance sheet shows total assets less current liabilities at £10,040, positive but modest relative to liabilities.
• Share capital is nominal (£1), reflecting the small scale and private ownership.

3. Cash Flow Assessment:

• Cash on hand decreased from £40,527 to £30,895, indicating some pressure on liquidity.
• Debtors reduced from £43,772 to £20,111, suggesting improved collections but possibly lower sales or outstanding invoices.
• The significant increase in trade creditors (£9,554 from £1,910) and other creditors (£36,703 from £68,631) suggests the company is managing payables to conserve cash.
• The introduction of hire purchase liabilities adds fixed repayment obligations that will impact future cash flow.
• Overall, the company is reliant on director support for going concern, indicating cash flow is tight and vulnerable to disruption.

4. Monitoring Points:

• Watch net current liabilities and liquidity ratios closely; sustained working capital deficits could impair operational flexibility.
• Monitor hire purchase repayment schedule and impact on cash flow.
• Track debtor days and creditor days for cash conversion cycle trends.
• Review director’s continued financial support and any changes in control or borrowing arrangements.
• Evaluate profitability and ability to generate cash internally once income statement data becomes available.