KAY BUILDING SERVICES LTD

Executive Summary

KAY BUILDING SERVICES LTD shows a positive financial trajectory with solid balance sheet metrics and improving liquidity since incorporation. The company’s capacity to meet short-term obligations appears strong, supported by effective management control. Credit approval is recommended with ongoing monitoring of lease liabilities and cash flow.

KAY BUILDING SERVICES LTD - Analysis Report

Company Number: 13527484

Analysis Date: 2025-07-20 15:38 UTC

1. Credit Opinion: APPROVE with conditions
   KAY BUILDING SERVICES LTD demonstrates a stable and improving financial position since incorporation in 2021. The company maintains positive net assets and net current assets, indicating adequate short-term liquidity to service debts. The owner's full control and consistent director involvement suggest sound management continuity. However, the company relies on finance leases and director loans, which should be monitored. Approval is recommended with conditions including ongoing review of cash flow and debt servicing, especially the hire purchase obligations, to ensure continued financial health.

2. Financial Strength:
   The company has grown net assets from £2,653 in 2021 to £29,053 in 2024, reflecting retained profits and business expansion. Tangible fixed assets net of depreciation are £11,547, supporting operational capacity. Current assets (£48,141) comfortably exceed current liabilities (£20,238), producing net current assets of £27,903, a healthy working capital position. Long-term liabilities of £10,397 (finance leases) are moderate given the asset base and equity level. Overall, the balance sheet is robust for a micro/small entity.

3. Cash Flow Assessment:
   Cash holdings increased from £8,525 in 2021 to £36,840 in 2024, showing improved liquidity. Debtors are manageable at £11,301 with no indication of significant provisioning or bad debts. Director loans within current liabilities have reduced (£2,383 in 2024 vs £5,630 in 2023), reducing short-term repayment pressure. The company’s ability to cover current liabilities nearly 2.4 times with cash and debtors indicates strong short-term liquidity and cash flow resilience.

4. Monitoring Points:

• Track repayment of finance lease obligations to avoid refinancing risk.
• Monitor director loans and ensure timely repayments or formalisation of terms.
• Watch cash conversion cycle and debtor days to avoid cash flow strain.
• Review profit trends once full profit and loss data become available for the latest year to confirm earnings sustainability.
• Keep an eye on any potential expansion that could impact working capital or require additional financing.