HP ELECTRICAL SOUTH EAST LTD

Executive Summary

HP Electrical South East Ltd is a newly established microenterprise positioned within the UK electrical installation sector, exhibiting strong profitability margins relative to its size. While benefiting from efficient cost management and agile governance, the company operates in a competitive and evolving market shaped by sustainability trends and regulatory demands. Its modest scale presents growth challenges, but a solid financial foundation and sector alignment provide a platform for expansion in niche electrical installation services.

HP ELECTRICAL SOUTH EAST LTD - Analysis Report

Company Number: 15398913

Analysis Date: 2025-07-29 14:55 UTC

1. Industry Classification
   HP Electrical South East Ltd operates within the electrical installation sector, classified under SIC code 43210. This sector primarily involves the installation, maintenance, and repair of electrical wiring, fixtures, and equipment in residential, commercial, and industrial premises. The industry is characterised by a mix of small to medium enterprises offering bespoke, on-site services with a focus on compliance with safety regulations and evolving electrical standards. The sector is labour-intensive, often requiring skilled electricians, and is subject to cyclical demand influenced by construction activity, refurbishment trends, and regulatory changes.

2. Relative Performance
   As a newly incorporated private limited company (incorporated January 2024), HP Electrical South East Ltd is in its first full financial year ending January 2025. With a turnover of £128,162, it qualifies as a micro or small enterprise by UK standards, falling well below the £10.2 million turnover threshold for small companies. The company has reported a robust gross margin (~74%), with operating profit of £66,085 and net profit after tax of £54,995, indicating efficient cost control relative to its revenue base. Its net assets stand at £7,697, supported by tangible fixed assets (motor vehicles) and positive working capital. Compared with typical peers in the electrical installation sector, which often operate on thin margins due to competitive pricing and labour costs, HP Electrical South East Ltd’s margin profile appears strong, though scale is limited. The balance sheet shows a conservative capital structure with low equity and some finance lease obligations.

3. Sector Trends Impact
   The UK electrical installation industry is currently influenced by several trends:

• Sustainability and Energy Efficiency: Increasing demand for installations related to renewable energy (solar panels, EV charging points) and energy-efficient systems drives growth opportunities.
• Construction Market Fluctuations: The sector’s performance is tied to new builds and refurbishment activities, which have been volatile due to economic uncertainties, inflationary pressures, and supply chain constraints post-Brexit and COVID-19.
• Skills Shortage and Labour Costs: A national shortage of qualified electricians elevates wage costs and operational challenges.
• Regulatory Environment: Stricter electrical safety and building regulations necessitate ongoing compliance investments.
  HP Electrical South East Ltd’s focus on electrical installation positions it to capture niche projects driven by these trends, particularly if it can leverage new technology and maintain quality standards.

4. Competitive Positioning
   HP Electrical South East Ltd functions as a niche microenterprise or small player within a fragmented market dominated by numerous small firms and some large contractors. Its competitive strengths include:

• Strong Profitability Metrics: High gross and operating margins suggest effective project management and cost control.
• Ownership and Control: Single director and significant control by Harry Pearce may enable agile decision-making and personalised client relationships.
• Asset Base: Ownership of motor vehicles supports operational mobility essential for onsite electrical services.
  However, challenges include:
• Limited Scale: Turnover and resources restrict ability to compete for large contracts or invest in advanced technologies.
• Financial Leverage: Use of hire purchase finance indicates reliance on external funding, potentially increasing fixed costs.
• Market Entry Risks: As a new entrant, it faces hurdles in establishing brand recognition and long-term client contracts amid established competitors.
  Compared to sector norms, the firm’s financial health is positive but scale and market presence remain modest.