KINGDOM RENOVATIONS & DEVELOPMENTS LTD

Executive Summary

Kingdom Renovations & Developments Ltd shows signs of operational activity but suffers from weak liquidity and minimal equity buffers. While the directors bring relevant industry experience, the company’s negative working capital and declining net assets suggest some risk in meeting short-term obligations. Credit approval should be conditional on close cash flow monitoring and debtor management to mitigate potential repayment difficulties.

KINGDOM RENOVATIONS & DEVELOPMENTS LTD - Analysis Report

Company Number: 13528538

Analysis Date: 2025-07-29 14:05 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Kingdom Renovations & Developments Ltd demonstrates ongoing trading activity with modest net assets and equity. However, the company has persistent net current liabilities (negative working capital) and low net asset levels, indicating a tight liquidity position and potential cash flow stress. The directors have relevant trade experience (carpenter and electrician), but the financials suggest limited buffer to absorb shocks or delays in receivables. Credit approval is possible but should be conditional on continued monitoring of cash flow and maintenance of receivables collection efficiency.

2. Financial Strength

• Net assets have declined significantly from £10,421 in 2021 to only £289 in 2024, reflecting erosion of equity possibly due to accumulated losses or depreciation.
• The balance sheet shows tangible fixed assets of £27,735, mainly plant, machinery, and motor vehicles, which provide some collateral value.
• Current liabilities (£97,047) exceed current assets (£74,870), producing a net current liability position of £22,177, which is a concern for short-term solvency.
• Deferred tax liabilities of £5,269 further reduce net asset backing.
• Shareholders’ funds are minimal (£289), indicating very low equity cushion.

3. Cash Flow Assessment

• Cash on hand is low but has increased slightly to £15,565, which is positive but insufficient to cover immediate liabilities.
• Trade debtors have increased to £59,305, with a significant portion (£35,100) due from participating interests; this concentration risk should be assessed carefully.
• The increase in creditors, especially taxation and social security liabilities (£18,183), suggests some pressure on cash outflows.
• Negative net working capital positions the company at risk if debtor collections slow or creditors demand faster payment.
• No audit was performed, so cash flow quality depends heavily on management integrity and controls.

4. Monitoring Points

• Watch for sustained improvement in net current assets and cash balances to ensure liquidity stability.
• Monitor debtor days and concentration risk on amounts owed by related parties (participating interests).
• Track profitability and equity trends in future accounts to assess whether losses are being contained.
• Confirm timely payment of tax and social security liabilities to avoid enforcement actions.
• Evaluate any new borrowing or changes in creditor terms that might affect financial flexibility.