HEDGEND DEVELOPMENTS LTD

Executive Summary

HEDGEND DEVELOPMENTS LTD is a micro-sized construction company with a weak financial position characterized by negative net assets and a working capital deficit. While the company is compliant with filings and operationally active, its financial resilience is limited. Credit approval is possible but should be conditional on improved liquidity, profitability, and ongoing monitoring of financial health.

HEDGEND DEVELOPMENTS LTD - Analysis Report

Company Number: 13254420

Analysis Date: 2025-07-20 17:37 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   HEDGEND DEVELOPMENTS LTD is an active micro private limited company operating in the building completion and domestic construction sector. The company shows negative net assets with shareholders' funds deteriorating from -£6,159 in 2023 to -£30,500 in 2024. This indicates accumulated losses and fragile equity. Current liabilities exceed current assets substantially, and the company carries significant long-term creditors (£179,954 as of 2024). However, the directors have maintained compliance with filing deadlines and there are no indications of formal insolvency or trading restrictions. Credit approval is conditional on close monitoring of working capital management and the company demonstrating improved profitability and cash flow generation in the near term.

2. Financial Strength:
   The balance sheet reveals fixed assets of only £14,314, which is minimal and unlikely to provide collateral value for lending. Current assets declined from £149,370 to £135,690 year-over-year, while current liabilities remained steady at £179,954, resulting in a working capital deficit. The company’s liabilities falling due after one year increased, indicating reliance on longer-term creditor funding rather than equity or bank financing. Negative shareholders' funds reflect ongoing accumulated losses and weak capitalisation, raising concerns about solvency if losses continue.

3. Cash Flow Assessment:
   Current liabilities exceed current assets by approximately £44,000, pointing to liquidity pressure. While the company employs only 2 people and is micro-sized, the limited working capital buffer reduces operational flexibility. Absence of disclosed profit and loss data limits assessment of cash flow from operations, but the worsening net liabilities suggest cash outflows exceed inflows. The company’s ability to meet short-term obligations depends on timely collection of receivables and control of payables. Without improvement, there is risk of liquidity strain.

4. Monitoring Points:

• Improvement in net current assets (working capital) to positive territory.
• Reduction in creditors due after more than one year to lower leverage.
• Evidence of positive retained earnings or reduced accumulated losses in future accounts.
• Cash flow statements (when available) indicating sustainable operating cash flow.
• Continued compliance with statutory filings and absence of director misconduct.
• Any changes in ownership, directorship, or business strategy affecting financial risk.