K BLYTHIN BRICK & STONEWORK LTD

Executive Summary

K Blythin Brick & Stonework Ltd exhibits poor financial health characterized by negative working capital and high finance lease liabilities. The company’s liquidity is strained and net assets have sharply declined over recent years, resulting in a weak credit profile. Credit facilities should be declined at this time due to the risk of repayment difficulties.

K BLYTHIN BRICK & STONEWORK LTD - Analysis Report

Company Number: 12683589

Analysis Date: 2025-07-29 16:56 UTC

1. Credit Opinion: DECLINE

K Blythin Brick & Stonework Ltd shows significant financial strain. The company has a very low net asset base (£663) and negative net current assets (-£7,424) as of June 2024, indicating liquidity challenges and working capital deficits. The large finance lease obligations (£64,210) are considerably higher than net assets, suggesting high leverage and potential difficulty in servicing debt. Additionally, cash reserves have dropped sharply from £14,835 to £6,016 in the last year, reducing liquidity further. Despite stable trade debtors, the company’s reliance on director loans and sizeable overdue finance lease liabilities raise red flags on financial resilience. The declining net assets from £40,035 in 2020 to just £663 in 2024 reflect a deteriorating financial trajectory. Given these factors, the company’s capability to meet credit obligations is weak without substantial improvement or capital injection.

2. Financial Strength:

The balance sheet reveals a high level of fixed assets (£65,802), mostly financed through finance leases, leading to significant creditor obligations falling due after one year (£57,715) and within one year (£28,816). The company’s net current liabilities position indicates insufficient short-term funds to cover immediate liabilities, which poses liquidity risk. Shareholders’ funds have shrunk drastically over four years, reflecting accumulated losses or distributions exceeding profits. The company’s modest share capital (£6) offers negligible buffer. The high gearing and negative working capital position undermine financial strength, and the company faces solvency risk if operational cash flow does not improve.

3. Cash Flow Assessment:

The cash balance declined by over 50% in the last year, and current liabilities have grown, suggesting cash outflows exceeding inflows. Negative net current assets imply the company is dependent on short-term borrowing or director loans to meet obligations. Director loans fluctuate but remain a material component of current assets, implying reliance on informal financing. The company’s capacity to generate positive operating cash flow is uncertain given the lack of detailed profit and loss data, but the balance sheet signals strained liquidity. The sizeable finance lease payments required annually further pressure cash flow. Working capital management appears weak, increasing risk of payment delays or defaults.

4. Monitoring Points:

• Cash conversion cycle and trade debtor collection efficiency
• Changes in finance lease obligations and debt maturity profile
• Operating profit margins and cash flow from core business activities
• Director loans movements and repayment plans
• Net asset trends and any significant capital injections
• Payment performance with suppliers and tax authorities

Summary:

K Blythin Brick & Stonework Ltd is currently in a weak financial position with low net assets, negative working capital, and high finance lease debt. Liquidity constraints and high leverage limit its ability to service additional credit reliably. Given the deteriorating financial trajectory and dependence on director loans, credit approval is not recommended without significant mitigation or guarantees.