ESSEX DRAINAGE SOLUTIONS LTD

Executive Summary

Essex Drainage Solutions Ltd has shown a commendable turnaround from initial losses to positive net assets and working capital within three years of incorporation. The company currently exhibits adequate liquidity and financial resilience typical of a micro entity, supporting a cautious credit approval. Close monitoring of financial performance and compliance filings is recommended given the company’s small scale and early development stage.

ESSEX DRAINAGE SOLUTIONS LTD - Analysis Report

Company Number: 13243870

Analysis Date: 2025-07-29 14:13 UTC

Credit Opinion:
APPROVE with caution. Essex Drainage Solutions Ltd is a very young micro private limited company showing a strong financial turnaround in the most recent reported year. While initial years reflected losses and negative net assets, the latest accounts demonstrate positive net assets and net current assets, indicating improved financial health. The company’s ability to meet short-term liabilities has significantly strengthened, suggesting capacity to service credit obligations. However, limited size, minimal equity, and lack of audit reduce transparency and increase risk, so credit limits should be modest and monitored closely.

Financial Strength:
The company moved from a net asset deficiency of £340 at 31 March 2023 to a positive net asset position of £6,918 at 31 March 2024. Fixed assets are minimal (£1,856), consistent with a micro entity, while net current assets improved from a negative (£1,945) to a positive £6,016, evidencing better liquidity management. Share capital remains nominal (£1), with shareholder funds at £6,918 reflecting retained earnings or capital injections boosting equity. Overall, the balance sheet strength has notably improved but remains modest in absolute terms.

Cash Flow Assessment:
Current assets increased to £7,525 and current liabilities reduced to £1,509, resulting in a strong working capital position. This suggests a solid liquidity buffer to cover short-term debts, reducing risk of cash flow strain. Although detailed cash flow statements are unavailable, the positive net current assets imply effective cash or receivables management. The absence of employees and minimal fixed assets highlight a lean cost structure, potentially aiding cash preservation. However, the small size and early stage require ongoing scrutiny of cash inflows and payment patterns.

Monitoring Points:

• Continued improvement or maintenance of positive net current assets and net assets.
• Timely filing of future accounts and confirmation statements to ensure regulatory compliance and data transparency.
• Any changes in director or ownership structure that could affect governance or credit risk.
• Evidence of contract wins or revenue growth to support sustainable cash generation.
• Monitor for any overdue payables or creditor pressure indicating liquidity stress.