GREY ROSE DEVELOPMENTS LTD

Executive Summary

Grey Rose Developments Ltd is a young construction company investing in fixed assets with initial operational scale-up. The company currently faces short-term liquidity challenges evidenced by negative working capital, though cash reserves and debtor balances have improved. Conditional credit approval is recommended with close monitoring of cash flow management, debtor collections, and profitability to ensure ongoing repayment capacity.

GREY ROSE DEVELOPMENTS LTD - Analysis Report

Company Number: 13507113

Analysis Date: 2025-07-29 14:04 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Grey Rose Developments Ltd is a recently established construction company showing initial asset investment and operational scale-up. While the company is active with no overdue filings and a growing asset base, its working capital position is currently negative (£24,411), which indicates short-term liquidity risk. The presence of long-term creditors (£28,291) further pressures liquidity. The directors appear credible with no adverse records, and the company is investing in fixed assets, which suggests growth intentions. However, cash resources remain modest (£30,662), and net assets are low (£16,498), reflecting early-stage capitalization. Credit approval should be conditional on monitoring cash flow improvements and working capital management.

2. Financial Strength:

• Fixed assets of £69,200, mainly tangible assets (land & buildings, plant, machinery), indicate investment in operational capacity.
• Current assets total £92,278 with debtors at £61,616; however, current liabilities stand at £116,689, resulting in negative net current assets of £24,411. This signals potential liquidity constraints if receivables are not converted promptly to cash.
• Long-term liabilities of £28,291 reduce net assets to £16,498, which is low but expected for a company in early development phase.
• Shareholders’ funds of £16,498 reflect limited equity backing consistent with a young company.
  Overall, the balance sheet shows a modest capital base with growth assets but short-term liquidity pressure.

3. Cash Flow Assessment:

• Cash at bank (£30,662) is relatively low compared to current liabilities but significantly improved from prior year (£100).
• The large debtor balance (£61,616) must be efficiently collected to sustain operations and meet short-term obligations.
• Negative working capital indicates reliance on financing or timely collections to cover payables and operational costs.
• The absence of profit and loss details limits assessment of profitability and cash generation but the increase in fixed assets and employees (average 9 in year) suggest operational scaling.
  Close attention to cash flow forecasts and debtor collections is warranted.

4. Monitoring Points:

• Liquidity ratios and working capital trends to ensure current liabilities are covered by current assets.
• Debtor aging and collection efficiency to avoid cash flow bottlenecks.
• Profitability and operating cash flow development in future filings to assess sustainable debt servicing capacity.
• Management of long-term liabilities and capital structure changes.
• Compliance with filing deadlines and any changes in director or PSC status.