FATEH CONSTRUCTION LTD

Executive Summary

Fateh Construction Ltd shows clear signs of financial distress with negative net assets and working capital deficits in its latest financial year, raising concerns about its ability to meet short-term obligations and sustain operations. While regulatory compliance is maintained and there is modest employee growth, the deterioration in financial health and concentrated ownership warrant careful further investigation before any investment consideration. Immediate focus should be on liquidity assessment and governance review to ascertain risk exposure.

FATEH CONSTRUCTION LTD - Analysis Report

Company Number: 13591372

Analysis Date: 2025-07-29 13:57 UTC

1. Risk Rating: HIGH
   Justification: The company exhibits negative net current assets and net liabilities as of the latest financial year (2024), indicating solvency and liquidity concerns. The deterioration from a positive net current asset position in 2023 to a significant negative position in 2024 suggests financial distress.

2. Key Concerns:

• Negative Net Current Assets: The company’s current liabilities (£16,893) exceed its current assets (£3,037) by £13,856 as of August 2024, reflecting a working capital deficit that may impair the ability to meet short-term obligations.
• Declining Financial Position: The net assets fell from a positive £1,842 in 2023 to negative £13,856 in 2024, indicating losses or increased liabilities that could threaten operational stability.
• Concentrated Control and Recent Director Changes: One individual holds 75-100% ownership and voting rights, and there was a director resignation and appointment within the last two years, which may imply governance or operational risks requiring further inquiry.

3. Positive Indicators:

• Compliance: The company is up to date with filings, including accounts and confirmation statements, with no overdue submissions, indicating adherence to regulatory requirements.
• Micro Entity Status: As a micro-entity, the company benefits from simplified reporting requirements, which may reduce administrative burden.
• Increasing Employee Count: The average number of employees increased from 3 to 4 in the latest year, which may signal some operational expansion or increased capacity.

4. Due Diligence Notes:

• Review detailed financial statements and management accounts to understand causes of the significant decline in net assets and working capital deficit.
• Assess cash flow statements and creditor payment history to evaluate liquidity pressures and potential risk of insolvency.
• Investigate director backgrounds and reasons for recent changes in management to understand any governance or operational risks.
• Examine contracts, project pipelines, and client concentration to assess sustainability of revenue streams in the construction industry sectors covered.
• Confirm any contingent liabilities or off-balance sheet risks that may further impact financial stability.