FLETCH & SONS LTD

Executive Summary

Fletch & Sons Ltd is an early-stage construction business with negative net assets and working capital deficits, indicating weak financial strength and liquidity risk. The company’s ability to service debt is currently limited, and credit facilities are not recommended without significant improvement in trading performance or additional funding. Close monitoring of cash flow and creditor management is essential going forward.

FLETCH & SONS LTD - Analysis Report

Company Number: 15399380

Analysis Date: 2025-07-29 14:55 UTC

1. Credit Opinion: DECLINE
   Fletch & Sons Ltd is a newly incorporated private limited company operating in the construction of domestic buildings. The latest accounts (first period ending 28 February 2025) show net liabilities of £5,516 and net current liabilities of £12,341, indicating the company is currently insolvent on a balance sheet basis. Current liabilities exceed cash and other current assets, reflecting weak liquidity and potential difficulty in meeting short-term obligations. The company has only one employee and minimal trading history, making it difficult to assess operational performance and financial resilience. The director is also the sole controlling shareholder, limiting external oversight. Given the negative net assets and working capital deficit at this early stage, the risk of default on credit facilities is high without further financial support or evidence of improved trading performance.

2. Financial Strength:
   The balance sheet shows fixed tangible assets of £6,825 (motor vehicle) against current liabilities of £26,518, resulting in net current liabilities of £12,341. Net assets are negative at £5,516, which is expected for a start-up but still a concern for granting credit. Shareholders' funds are negative, reflecting accumulated losses or initial funding shortfalls. The lack of equity cushion means the company has limited financial flexibility. Creditors include a significant "other creditors" balance of £15,000, which may indicate short-term financing or trade credit that needs monitoring. The company’s financial strength is weak and currently dependent on additional funding or profitable trading to improve.

3. Cash Flow Assessment:
   Cash at bank is £14,177, which covers just over half of the short-term liabilities of £26,518. The working capital deficit suggests potential liquidity stress, especially if cash inflows from operations are inconsistent or delayed. The accounts do not provide a cash flow statement, but the negative net current assets imply reliance on external funding or extended credit terms to meet obligations. The low employee count and early stage of operations suggest limited internal cash generation so far. Without clear evidence of positive cash flow from trading, liquidity risk remains high.

4. Monitoring Points:

• Monitor quarterly trading performance and cash flow to assess whether the company achieves positive operating cash flow.
• Watch changes in net current assets and liquidity ratios to see if working capital improves.
• Review any new capital injections or financial support from the director/shareholder to shore up equity.
• Track creditor balances, especially "other creditors," for any signs of payment delays or disputes.
• Evaluate management’s strategic plan and evidence of contract wins or pipeline growth in domestic construction.