LBA CONTRACTS LIMITED

Executive Summary

LBA Contracts Limited has demonstrated a modest financial recovery in its second full year of trading, moving from negative equity to a small positive net asset position. The company holds limited tangible assets but maintains a positive working capital supported by cash reserves. Credit approval is recommended on a conditional basis with a focus on monitoring liquidity, profitability, and statutory payment compliance as the company establishes its business.

LBA CONTRACTS LIMITED - Analysis Report

Company Number: SC760842

Analysis Date: 2025-07-29 19:11 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   LBA Contracts Limited is a very young company (incorporated March 2023) currently operating in the building and industrial cleaning sector. Despite initial losses reflected in negative net assets in its first two years, the latest financial year shows a modest but positive turnaround with net assets improving to £654. The company remains a micro entity with limited scale and modest working capital. The director and sole significant controller, Mrs. Laura Barnes, shows continuity and control, which is positive for governance. However, given the company's early stage, limited trading history, and modest financial base, credit approval should be conditional on ongoing financial performance monitoring and clear evidence of cash flow stability.

2. Financial Strength:
   The company’s balance sheet has improved significantly from a negative equity position of (£1,322) in 2024 to a small positive net asset position of £654 in 2025. The fixed assets have been fully written down or disposed of, resulting in no net fixed assets as of the latest accounts. Shareholders’ funds increased from a negative £1,422 to a positive £554. This shows that the company has improved profitability or injected capital to reverse prior losses. Current liabilities increased to £4,695 but the company holds cash of £5,349, providing a positive net current asset position of £654, indicating a modest but positive working capital position.

3. Cash Flow Assessment:
   Cash of £5,349 against current liabilities of £4,695 provides a narrow liquidity buffer. The company needs to maintain or grow this cash balance to ensure it can meet short-term obligations. The absence of trade creditors and the majority of current liabilities being taxation and social security suggests accrual of statutory debts rather than commercial payables, which may require timely settlement to avoid penalties. The positive net current assets show some short-term liquidity but limited cushion for unexpected shocks. Ongoing cash flow monitoring is advised given the small absolute values involved.

4. Monitoring Points:

• Continued profitability and cash flow generation to sustain positive net assets and working capital.
• Timely settlement of tax and social security liabilities to avoid enforcement action.
• Monitor any changes in director or ownership structure that could impact governance.
• Watch for any late filing of accounts or confirmation statements as a red flag.
• Maintain oversight of any growth in liabilities relative to assets as the company scales operations.