HAYMARKET LIMITED

Financial Health Score: B+

Haymarket Limited exhibits the robust constitution of a mature, established business with steady long-term equity growth. However, the recent significant expansion in short-term liabilities to fund what appears to be a major project has slightly strained its circulatory system (liquidity), preventing a perfect score. The patient is healthy but requires careful monitoring of cash flow in the near term.

1. Key Vital Signs

Equity Constitution (Net Assets) - Stable & Growing Over the past nine years, the company’s net assets have grown consistently from £629,871 in 2017 to £708,268 in 2025. This shows a steady, healthy accumulation of wealth, much like a patient maintaining a strong baseline constitution year after year.

Circulatory Health (Liquidity) - Slightly Strained In 2025, Current Assets jumped to £2.25M (up from £1.72M), but Current Liabilities surged to £1.79M (up from £1.13M). The Current Ratio (a measure of the company's ability to pay its short-term obligations) has dropped from a healthy 1.52 in 2024 to 1.26 in 2025. While still above 1.0 (meaning they can cover their short-term debts), the rapid increase in short-term creditors suggests the business is leaning heavily on supplier credit to fund current operations.

Musculoskeletal Strength (Fixed Assets) - Strengthening Fixed assets grew from £476,922 to £521,345, indicating the company is investing in the equipment or property needed for its construction operations. This is a positive sign of long-term operational health.

Nutritional Intake (Profit Retention) - Low for the Period Despite a massive expansion on the balance sheet, net assets only grew by £599 (£708,268 - £707,669) in 2025. This suggests that while revenue activity has increased, profit margins may be very tight, or the directors have extracted the profits as dividends rather than retaining them in the business.

2. Diagnosis

Diagnosis: Acute Growth Spurt with Working Capital Strain

Haymarket Limited is a 26-year-old construction business displaying symptoms of a significant, recent growth spurt. The balance sheet has swollen considerably compared to previous years, driven largely by a spike in both current assets (likely work-in-progress or trade debtors) and current liabilities (likely trade creditors or short-term overdrafts).

In the construction industry, this is a classic pattern when taking on a large commercial or domestic project: you must buy materials and labor (current liabilities) before you get paid (current assets). The patient is not sick, but its "blood flow" is under pressure. The drop in the current ratio means more of the company's cash is tied up in the ongoing project. Furthermore, the minimal increase in overall net assets despite the massive increase in business volume suggests that either margins on this large project are thin, or significant dividends were paid out to the three PSCs (People with Significant Control), leaving little financial cushion inside the business itself.

3. Recommendations

To maintain optimal financial health and navigate this period of expansion safely, I recommend the following regimen:

• Monitor Cash Flow Intensely: With short-term liabilities approaching £1.8M, the company must ensure its "blood flow" remains fluid. Tight credit control and prompt invoicing are essential to convert those current assets into cash before creditors demand payment.
• Review Project Margins: Investigate why the significant increase in business volume did not result in a proportionate increase in retained profits. Ensure that the large contracts being undertaken are generating adequate gross margins to justify the increased risk and working capital strain.
• Strengthen the Liquidity Buffer: Consider retaining a greater portion of profits within the business rather than distributing them as dividends. A current ratio of 1.26 is adequate, but in the volatile construction trade, having a stronger cash buffer protects against unexpected project delays or bad debts.
• Manage Creditor Terms: Continue to negotiate favorable payment terms with suppliers to ensure that the outflow of cash aligns with the inflow from clients.