KEITH CLANCY PLUMBING AND HEATING SERVICES LTD

Executive Summary

Keith Clancy Plumbing and Heating Services Ltd is a small, active plumbing company showing profitability but with declining net assets and liquidity due to dividend payouts and reduced cash balances. The company maintains positive net current assets but relies on director loans, indicating tight cash flow. Conditional credit approval is advised with close monitoring of liquidity, debtor collection, and dividend policy to ensure ongoing repayment capacity and financial stability.

KEITH CLANCY PLUMBING AND HEATING SERVICES LTD - Analysis Report

Company Number: 14402205

Analysis Date: 2025-07-20 18:23 UTC

1. Credit Opinion: CONDITIONAL APPROVAL

Keith Clancy Plumbing and Heating Services Ltd is a recently established small plumbing and heating installation company with active status and no history of insolvency or director misconduct. The company shows profitability over the last two reported years but exhibits a declining net asset base and reduced working capital in the latest year. While current liabilities remain sizeable relative to current assets, the company maintains positive net current assets and net equity. The director is the sole shareholder and actively manages the business, which supports accountability. However, the company’s liquidity has declined significantly year-on-year, and reliance on director loans suggests some cash flow constraints. Approval is recommended with conditions such as monitoring liquidity closely and ensuring timely repayment of director loans.

2. Financial Strength:

• Net assets decreased from £13,382 at 31/12/2023 to £7,679 at 31/12/2024, reflecting dividend payouts exceeding profits retained.
• Tangible fixed assets are low (£1,761), typical for the service sector, with no impairment indicated.
• Shareholder funds equal net assets, showing no external equity funding.
• Current assets (£24,011) cover current liabilities (£18,208) with a net current asset surplus of £5,803, indicating short-term solvency.
• However, cash balances nearly halved from £26,688 to £12,827, reducing liquidity buffer.
• Debtors decreased but constitute a significant portion of current assets (£11,184), which may pose collection risk.
• Creditors are mainly tax and social security liabilities (£16,738), which require prompt settlement.

3. Cash Flow Assessment:

• Cash at bank reduced by over 50% year-on-year, indicating tighter cash flow.
• Debtors are moderately high compared to turnover (not disclosed but presumably modest given company size), suggesting some working capital tied up in receivables.
• Director’s loan of £9,892 remains outstanding but is stated to be repayable within 9 months of year-end, which should improve liquidity when settled.
• Dividend payments totaling £46,000 over two years have strained retained earnings and cash resources.
• The company employs 2 staff, keeping overheads low.
• No bank borrowings or overdrafts reported, implying limited external debt pressure but also limited financial flexibility.

4. Monitoring Points:

• Liquidity ratios and cash balances, with focus on the director loan repayment schedule.
• Debtor collection efficiency to ensure working capital is not unduly strained.
• Dividend policy relative to profit generation and cash flow.
• Tax liabilities management to avoid penalties or enforcement action.
• Profitability trends as future financials become available to assess business growth and sustainability.
• Any changes in director status or control that may affect governance.