KERSTEN BUILDING MAINTENANCE LTD

Executive Summary

Kersten Building Maintenance Ltd shows early signs of growth with increasing net assets and strong net current assets. However, its low cash balance and substantial long-term creditors warrant caution. Credit can be conditionally approved subject to close monitoring of liquidity and creditor management.

KERSTEN BUILDING MAINTENANCE LTD - Analysis Report

Company Number: 12886462

Analysis Date: 2025-07-29 18:26 UTC

1. Credit Opinion: CONDITIONAL APPROVAL. Kersten Building Maintenance Ltd is a young, small private limited company operating in the development of building projects sector. The company shows a positive growth trajectory in assets and net equity over the past three years. However, the presence of substantial long-term creditors (£38,056) compared to modest net assets (£2,558) raises some concern about leverage and financial structure. The company appears to be managing its liabilities but with limited cash reserves (£535). Approval is recommended if the credit facility is structured to match the company’s working capital cycle and contingent on continued monitoring of trade creditor levels and cash flow liquidity.

2. Financial Strength: The company’s net assets have increased from £1,524 in 2022 to £2,558 in 2023, indicating retained earnings growth and some capital strengthening. The balance sheet shows current assets of £40,857 against current liabilities of £243, resulting in a very strong net current asset position. However, significant creditors of £38,056 are classified as amounts falling due after one year (long-term liabilities), which heavily influence the capital structure. The company lacks significant cash reserves and fixed assets appear minimal or unreported, which may limit collateral availability.

3. Cash Flow Assessment: Cash on hand is very low at £535, despite an increase in debtors (£28,464) and stock (£11,858), suggesting a potential liquidity risk if collections are delayed or stock is not readily convertible to cash. Current liabilities are minimal, but the large long-term trade creditors could impact future cash requirements. The working capital position is positive, but cash flow management must be cautious to avoid liquidity strain, especially given the company’s growth stage and sector risks.

4. Monitoring Points:

• Trade creditor levels and their payment terms relative to debtor collection periods.
• Cash flow trends, particularly around cash conversion cycle and liquidity buffers.
• Profitability and revenue growth to support repayment capacity.
• Any changes in long-term liabilities or emergence of additional debt.
• Compliance with filing deadlines and maintenance of accurate financial records.