Company Number: 13032345

Analysis Date: 2025-07-19 12:53 UTC

1. Risk Rating: LOW
   The company demonstrates solid solvency and liquidity metrics, with positive net current assets and net assets consistent over recent years. It maintains timely filing compliance and an unqualified audit opinion with no going concern issues flagged.

2. Key Concerns:

• Declining Profit Before Tax: Profit before tax decreased from £1.12m in 2022/23 to £924k in 2023/24, indicating pressure on profitability that warrants monitoring.
• Reduced Cash Balances: Cash at bank declined from £2.36m to £2.12m despite steady turnover, suggesting tighter cash flow management or increased working capital requirements.
• Concentration Risk: The business operates in a niche sector (hard landscaping materials) with exposure to supply chain and foreign exchange risks, which could impact margins if not effectively managed.

3. Positive Indicators:

• Strong Working Capital Position: Net current assets remain positive at £306k, indicating the company can meet short-term obligations comfortably.
• Compliance and Governance: No overdue filings or regulatory issues; audit report is clean with no material uncertainties on going concern.
• Sustainable and Ethical Focus: Employee Ownership Trust structure and commitments to environmental sustainability and ethical standards provide operational stability and enhance reputation.

4. Due Diligence Notes:

• Review detailed cash flow statements to understand sources and uses of cash and the reasons behind the reduction in cash balances.
• Assess customer concentration and credit risk management practices given the significant debtor balances (~£1m).
• Confirm currency hedging policies and supplier diversification effectiveness to mitigate foreign exchange and supply chain risks.
• Evaluate impact of market competition on future profitability and order book strength given the slight decline in turnover and profit.