KEYNSHAM AND CHEW VALLEY HEATING LTD

Executive Summary

Keynsham and Chew Valley Heating Ltd is a newly formed company showing initial operational activity but with limited financial strength and negative working capital at year end. The company’s ability to meet short-term liabilities and service debt is conditional on improving liquidity and cash flow management. Close monitoring of working capital and tax obligations is essential before extending credit facilities.

KEYNSHAM AND CHEW VALLEY HEATING LTD - Analysis Report

Company Number: 15257865

Analysis Date: 2025-07-20 17:56 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Keynsham and Chew Valley Heating Ltd is a newly incorporated private limited company (since November 2023) operating in the plumbing, heating, and air-conditioning installation sector. Although the company is active and has filed up-to-date accounts and confirmation statements with no overdue filings, its financial position as at 30 November 2024 shows some weaknesses that warrant caution. The company reported net current liabilities of £5,294 and very modest net assets of £178, indicating tight liquidity and minimal equity buffer. The company’s ability to service debt depends heavily on improving cash flow and managing working capital effectively. Approval is conditional on monitoring liquidity improvements and receivables/payables management.

2. Financial Strength:
   The balance sheet reveals fixed tangible assets of £6,756 (primarily motor vehicles and computers), and current assets of £15,129, mostly cash (£13,817). Current liabilities are £20,423, including a significant balance of "other creditors" at £14,401 and tax-related liabilities (£5,499 total for corporation tax and social security). The company has a negative working capital position (-£5,294), signaling potential cash flow pressure in meeting short-term obligations. Shareholders’ funds stand at a nominal £178, reflecting the company’s early stage and limited retained earnings. While the company is solvent on a net assets basis, its balance sheet strength is fragile, with very limited equity and working capital shortfall.

3. Cash Flow Assessment:
   Cash on hand is relatively healthy at £13,817, but the company’s current liabilities exceed current assets, signaling tight liquidity. The presence of corporation tax and social security liabilities suggests tax payments are due shortly, which could stress cash flow further if not managed carefully. Debtors are low (£1,312), indicating limited outstanding receivables, which is positive, but the company must convert sales into collected cash promptly. The company employs only one person (including the director), so payroll cost pressure is minimal. Overall, the liquidity profile requires close attention to avoid payment delays.

4. Monitoring Points:

• Working capital trends: improvements in net current assets and reduction in trade and other creditors.
• Timely payment of tax liabilities to avoid penalties.
• Cash flow forecasting and management, ensuring liquidity to meet obligations.
• Revenue growth and margin development to build reserves and strengthen equity base.
• Any further capital injections or financing arrangements initiated by the sole shareholder to support operations.
• Director’s management of payables and receivables to smooth cash flow cycles.