Company Number: 12745903

Analysis Date: 2025-07-29 16:54 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Hennessey Construction Consultancy Ltd is an active private limited company with no overdue filings and a clean director record. The company shows solid net current asset positions and positive net assets, indicating financial strength. However, there is a noticeable decline in net assets and liquidity from prior years, with cash balances dropping significantly from £73,990 in 2021 to £15,514 in 2024, and net assets decreasing from £110,971 to £90,454 over the same period. The company’s debtor balance remains substantial and unchanged at £85,000 for multiple years, which raises concerns about the collectability and turnover of receivables. Given the concentrated control by a single director and owner, there is some key person risk. Approval is recommended with conditions requiring close monitoring of cash flow, debtor management, and profitability trends before extending or increasing credit limits.

2. Financial Strength:
   The company’s balance sheet shows a strong working capital position with net current assets of £90,444 as of 2024, which comfortably covers current liabilities of £10,070. Shareholders’ funds stand at £90,454, indicating positive equity and no reliance on external borrowings disclosed. Fixed assets are negligible (£10), consistent with a consultancy business model. The company qualifies as a small entity, so detailed profit and loss data is limited. The sustained high debtor balance without a reduction suggests slow collections or extended credit terms. The drop in cash reserves over recent years is a point of concern, potentially signaling liquidity strain.

3. Cash Flow Assessment:
   Cash on hand has declined materially over the last three years from £73,990 in 2021 to £15,514 in 2024, which could indicate higher cash outflows than inflows or increased working capital needs. Despite net current assets remaining positive, the reduced cash position weakens immediate liquidity. The static debtor figure of £85,000 over multiple years may tie up cash and impair the company’s ability to meet short-term obligations. The relatively low current liabilities reduce pressure but the company should ideally improve cash conversion cycles and debtor collections.

4. Monitoring Points:

• Debtor turnover and age analysis to assess collectability and credit risk.
• Cash flow trends, focusing on operational cash generation and liquidity buffers.
• Profitability developments and retained earnings trajectory to ensure sustainable equity.
• Director/key person risk given the sole control and management by Michael James Hennessey.
• Any changes in credit terms or business strategy that could impact working capital requirements.