K.P.WILTON & SON LIMITED

Financial Health Score: B+

Explanation: The patient exhibits a strong and growing constitution, evidenced by consistent increases in net assets and retained earnings. However, there are acute symptoms of cash flow constriction and a heavy reliance on debtor balances, which acts as a circulatory system blockage. While the overall condition is robust, the declining cash reserves require monitoring to ensure the business maintains adequate liquidity to fund its ongoing property development activities.

Key Vital Signs

1. Net Assets (The Skeleton) * Metric: £2,189,842 (up from £1,817,995 in 2024) * Interpretation: The structural foundation of the business is strengthening. Net assets have grown by over £370,000 in the last year, indicating that the business is retaining profits and building equity rather than distributing it all. This is a sign of a healthy, growing entity.

2. Cash Position (Blood Pressure) * Metric: £782,546 (down from £1,581,689 in 2024) * Interpretation: Cash is the lifeblood of any business. While still positive, cash levels have halved over the past year and are significantly down from the 2023 peak of £2.7m. This drop suggests the business is reinvesting heavily or experiencing delays in collecting money owed, which puts pressure on the circulatory system.

3. Debtors (Digestive System) * Metric: £3,913,958 (up from £2,156,218 in 2024) * Interpretation: This is the most significant symptom. The amount owed to the company has nearly doubled in one year. Given the nature of the business (property development) and the ownership structure (connected to "Holdings" and "Developments" entities), this likely represents inter-company loans or amounts due from group projects. While common in development groups, if these funds cannot be recalled quickly, the company could face a liquidity crisis.

4. Current Liabilities (Cholesterol) * Metric: £3,289,382 (up from £2,736,878) * Interpretation: Short-term obligations are rising. However, with Net Current Assets of £1.4m, the business has a healthy "current ratio" (approx. 1.43:1), meaning it has £1.43 of assets for every £1 of short-term debt. This is a healthy ratio, but the quality of those assets depends heavily on the collectability of the debtors.

5. Profitability (Metabolism) * Metric: Retained earnings increased by £371,847. * Interpretation: The business is metabolizing revenue into retained profit effectively. The increase in shareholders' funds confirms the company is trading profitably, not just increasing asset values through revaluation.

Diagnosis

Condition: Chronic Robustness with Acute Liquidity Symptoms

The financial data reveals a company that is fundamentally healthy but experiencing a shift in its financial composition. The transition from cash to debtors suggests that K.P. Wilton & Son Limited is acting as a banker for its wider group or is funding development costs that are yet to be realized as cash.

• Healthy Signs: The steady growth in net assets from £210k in 2016 to £2.19m in 2025 is excellent. It shows long-term value creation. The business is profitable and has a solid capital base.
• Symptoms of Distress: The sharp decline in cash alongside a spike in debtors is a classic symptom of a business growing faster than its cash cycle supports. If the debtors are inter-company balances (as suggested by the PSC register showing ownership by "Holdings" and "Developments" entities), the risk is that cash is trapped in the wider group structure.

The company is not insolvent, but it is "asset rich, cash poor" relative to its position two years ago. The high debtor balance is the primary risk factor—if these debts become impaired or simply cannot be collected when needed, the company could struggle to meet its own short-term liabilities despite looking strong on paper.

Recommendations

1. Debtor Health Check: Conduct an immediate review of the £3.9m debtor book. Verify the age and collectability of these debts. If they are inter-company balances, formalize repayment schedules to ensure cash returns to this entity when required.
2. Cash Flow Forecasting: With cash dropping significantly, implement rigorous 13-week cash flow forecasting. This acts as a "heart monitor" to ensure the business does not run into an unexpected cash crunch, given the high level of current liabilities.
3. Review Group Structure: Given the PSCs, assess whether the current structure is tax and cash efficient. Ensure that the funding provided by this company to others in the group is generating a sufficient return to justify the liquidity risk.
4. Working Capital Management: Monitor the gap between current assets and current liabilities closely. While the current ratio is healthy, the reliance on debtors to cover short-term creditors means the business is vulnerable to delays in payment.