HOAD CONSTRUCTION GROUP LIMITED

Executive Summary

The company is a recently incorporated micro-entity engaged in construction with a solvent balance sheet but negative working capital, indicating potential liquidity pressures. While statutory compliance is good and equity has grown, the absence of employees and significant prepayments require further review to fully understand operational and cash flow sustainability. Overall, the risk is medium, warranting targeted due diligence on liquidity and business operations.

HOAD CONSTRUCTION GROUP LIMITED - Analysis Report

Company Number: 13971391

Analysis Date: 2025-07-29 19:36 UTC

1. Risk Rating: MEDIUM
   The company shows a moderate risk profile primarily due to current liabilities exceeding current assets, indicating potential liquidity constraints. However, it remains solvent on a net asset basis with positive shareholders' funds and no signs of insolvency or overdue filings.

2. Key Concerns:

• Liquidity Shortfall: Current liabilities (£41,019) exceed current assets (£31,383), resulting in negative net working capital, which may pressure short-term cash flows.
• Prepayments and Accrued Income: A significant amount (£49,096) recorded under prepayments and accrued income raises questions about timing and collectability, impacting working capital assessment.
• No Employees Reported: The company has zero employees on average, which may indicate reliance on contractors or limited operational capacity that could affect business sustainability.

3. Positive Indicators:

• Growing Shareholders’ Funds: Equity increased from £25,229 in 2023 to £40,107 in 2024, reflecting retained earnings or capital injections enhancing solvency.
• Compliance and Timeliness: All statutory filings, including accounts and confirmation statements, are up to date, demonstrating good regulatory compliance and governance.
• Owner Control and Stability: The sole significant controller holds 75-100% shares and voting rights, providing clear leadership and decision-making authority.

4. Due Diligence Notes:

• Clarify the nature and recoverability of prepayments and accrued income to assess true liquidity position.
• Review cash flow statements and bank balances to understand actual liquidity and ability to meet short-term obligations.
• Investigate business model given absence of employees—determine if subcontracting is the norm and assess related operational risks.
• Confirm any off-balance sheet liabilities or contingent risks not disclosed in micro-entity accounts.
• Assess director background and experience further given the company’s recent incorporation and construction industry risks.