DTS CONSTRUCT LTD

Executive Summary

DTS Construct Ltd is a small, active construction company demonstrating solvency with positive net assets but facing liquidity challenges evidenced by low cash levels. The limited financial history and absence of profitability data warrant careful review of cash flow and debtor management. Regulatory compliance is satisfactory, and the directors’ industry experience is a positive factor, though governance concentration should be monitored.

DTS CONSTRUCT LTD - Analysis Report

Company Number: 13822845

Analysis Date: 2025-07-20 16:24 UTC

1. Risk Rating: MEDIUM

Justification: DTS Construct Ltd is a recently incorporated construction company (since December 2021) with modest financial figures typical of a small enterprise. The company shows positive net current assets and shareholders’ funds, indicating solvency at the balance sheet date. However, the low cash balance relative to current liabilities and the drop in cash from £9,303 to £891 in the latest year presents liquidity concerns. The absence of an audit (permitted for small companies) limits external verification of financial robustness. Overall, the company appears solvent but with some liquidity risk and limited financial history.

2. Key Concerns:

• Liquidity: Cash reserves have significantly decreased to just £891 against current liabilities of £25,251, which may strain short-term cash flow.
• Profitability and operational sustainability: The accounts do not include an income statement, so it is unclear whether the company is profitable or incurring losses, which is critical for assessing ongoing viability.
• Concentration of control: The three directors collectively hold significant ownership and control (each 25-50%). While common in small private companies, this may present governance risks if decision-making is not sufficiently independent.

3. Positive Indicators:

• Positive net current assets (£7,141) and shareholders’ funds (£15,135) indicate the company’s assets exceed liabilities, supporting solvency.
• Timely filing of accounts and confirmation statements with no overdue filings suggests good regulatory compliance.
• Experienced directors with relevant occupations (builder, carpenter) align with the industry, potentially supporting operational capability.
• The company benefits from small company exemptions, reducing administrative burden and costs.

4. Due Diligence Notes:

• Obtain and review the company’s income statement or management accounts to assess profitability and cash flow trends.
• Investigate the reasons behind the sharp reduction in cash balances and the company’s working capital management practices.
• Confirm the collectability of trade debtors (£29,564), as high debtor balances relative to cash may indicate collection risk.
• Review any contingent liabilities or off-balance-sheet obligations not reflected in the current filings.
• Assess related party transactions, especially given the directors’ significant control and any loans or advances to directors.
• Consider external references or credit checks to supplement limited financial disclosure.