HIVE DEVELOPMENTS CONSTRUCTION LIMITED

Executive Summary

Hive Developments Construction Limited exhibits modest financial stability with positive net assets and working capital but faces liquidity challenges due to very low cash reserves. The company’s financial health is fragile, necessitating focused cash flow management and operational scaling to improve resilience and support growth in the competitive construction sector.

HIVE DEVELOPMENTS CONSTRUCTION LIMITED - Analysis Report

Company Number: 13628287

Analysis Date: 2025-07-29 13:42 UTC

Financial Health Assessment: HIVE DEVELOPMENTS CONSTRUCTION LIMITED (as at 31 March 2024)

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1. Financial Health Score: C

Explanation:
The company shows modest net assets and positive working capital, indicating some financial stability. However, the very low cash balance and declining net assets over the years suggest liquidity concerns and limited financial cushioning. The absence of employees and minimal operational scale also imply early-stage or limited trading activity. The score "C" reflects a stable but fragile financial position requiring attention to liquidity and growth.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£15,922	Primarily debtors; low cash reserves indicate tight liquidity.
Cash at Bank	£65	Critically low cash balance; symptoms of cash flow stress.
Debtors	£15,857	High receivables relative to cash; potential collection risk.
Current Liabilities	£11,400	Accruals and payables manageable but due soon.
Net Current Assets (Working Capital)	£4,522	Positive but declining; indicates limited short-term buffer.
Net Assets (Shareholders’ Funds)	£4,522	Small equity base with a downward trend, signaling erosion of capital.
Profit & Loss Reserve	£4,521	Retained earnings are low, showing limited accumulated profit.
Employee Count	0	No employees; suggests minimal operations or reliance on contractors.

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3. Diagnosis

• Liquidity Symptoms: The company’s near-zero cash on hand is a significant red flag, akin to a patient with a healthy heart rate but dangerously low oxygen levels. While debtors (£15,857) represent money due, the conversion into cash is uncertain and may be delayed, risking operational strain.

• Working Capital: Positive but declining working capital suggests the company is able to meet short-term obligations but with decreasing margin. This may limit agility to respond to financial pressures or invest in growth.

• Profitability & Reserves: The company has accumulated modest retained earnings but no evidence of strong profitability or growth. The slight decline in net assets over the last year suggests some erosion of value or minor losses.

• Operational Scale: Zero employees indicate a very lean operation, potentially reliant on subcontractors or project-based work. This can reduce fixed costs but may also limit growth capacity and control over project delivery.

• Governance & Control: Sole control by Mr. Simon Black ensures clear decision-making but concentrates financial risk and operational responsibility.

• Industry Context: Operating in construction of domestic and commercial buildings and development of building projects, a capital-intensive and competitive sector, the company’s financial base is currently small, indicating early stage or niche activity.

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4. Recommendations

• Improve Cash Flow Management:

  • Prioritize collection of outstanding debtors to increase cash reserves.
  • Negotiate longer payment terms with creditors to smooth cash outflows.
  • Consider short-term financing or overdraft facilities to buffer liquidity needs.

• Build Financial Cushion:

  • Retain earnings and avoid unnecessary withdrawals to strengthen equity base.
  • Explore opportunities to increase profitable contracts or diversify income streams.

• Operational Scaling:

  • Evaluate the feasibility of employing key personnel or skilled subcontractors to expand capacity and control.
  • Implement robust project and cost management to improve margins.

• Financial Monitoring:

  • Establish regular cash flow forecasting to anticipate liquidity gaps.
  • Monitor working capital trends monthly to detect early signs of distress.

• Governance:

  • Maintain transparent financial records and consider external advisory support to enhance financial planning.

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Medical Analogy Summary

The company’s financial "vital signs" show a stable but weak pulse with dangerously low "oxygen" (cash). There are no acute "symptoms" of insolvency, but the "patient" is vulnerable without intervention to improve liquidity and operational strength. The prognosis is fair if corrective actions are taken promptly to bolster cash flow and build resilience.

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