LEGACY BRICKWORK LTD

Executive Summary

LEGACY BRICKWORK LTD shows a solid and improving financial position with strong liquidity, positive working capital, and growing net assets indicative of sound operational health. While the company is financially stable and profitable, it should focus on diversifying management and maintaining disciplined financial controls to support sustainable growth. Overall, the financial health is good, rated B, with positive prospects if current trends continue.

LEGACY BRICKWORK LTD - Analysis Report

Company Number: 13660792

Analysis Date: 2025-07-20 17:50 UTC

Financial Health Assessment of LEGACY BRICKWORK LTD as at 31 March 2025

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1. Financial Health Score: B

Explanation:
LEGACY BRICKWORK LTD demonstrates a solid and improving financial position with healthy liquidity and steadily growing net assets. The company shows sound working capital management and positive net asset growth. However, the reliance on a single director and relatively modest fixed assets base limit the score from reaching an A grade.

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2. Key Vital Signs

Metric	2025 Value (£)	Interpretation
Fixed Assets	15,185	Moderate investment in tangible assets suitable for a micro/small construction business. Stable asset base.
Current Assets	104,789	Healthy level of short-term assets, including cash and debtors.
Cash at Bank	83,210	Strong cash reserves, indicating excellent liquidity and ability to meet short-term obligations.
Debtors	11,813	Moderate receivables, manageable relative to cash and turnover.
Current Liabilities	94,978	Current obligations are significant but well covered by current assets.
Net Current Assets (Working Capital)	9,811	Positive working capital indicates ability to cover short-term liabilities, a sign of good operational health.
Net Assets / Shareholders’ Funds	24,996	Positive and increasing equity base, showing retained earnings growth and financial stability.
Profit & Loss Reserve	24,995	Accumulated profits have more than doubled since 2024, reflecting profitability and business growth.

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3. Diagnosis: Financial "Health" and Symptoms

• Healthy Cash Flow and Liquidity:
  The company’s cash balance has increased substantially from £62,307 in 2024 to £83,210 in 2025. This healthy cash flow is a vital sign of good operational performance and prudent cash management, akin to a patient with a strong heartbeat.

• Positive Working Capital (Net Current Assets):
  The net current assets have improved from a negative £3,440 in 2024 to a positive £9,811 in 2025. This shift indicates the company has overcome a short-term liquidity strain (symptom of distress) and now comfortably covers its current obligations with short-term assets.

• Growth in Net Assets and Profit Reserves:
  The net assets nearly tripled from £9,002 to £24,996, reflecting retained profits and reinvestment in the business. This is a sign of strengthening financial "bones" — a sturdy foundation for future growth.

• Asset Management:
  Tangible fixed assets are modest but appropriate for a small bricklaying company. Investment in plant, tools, and equipment has increased, showing reinvestment to support operations.

• Single Director and Employee:
  The company is run by a sole director who is also the primary employee. While this is common in small businesses, it presents a risk factor analogous to a single point of failure in health care — potential vulnerability if the director is unable to manage the business.

• No Audit Requirement:
  The company qualifies for audit exemption under small companies’ regime, implying a simpler financial structure but also less external scrutiny. This demands attention to internal controls and financial discipline.

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4. Recommendations for Financial Wellness Improvement

• Strengthen Working Capital Monitoring:
  Continue to monitor and optimise receivables and payables to maintain positive working capital. Consider negotiating payment terms to improve cash conversion cycles.

• Build Fixed Asset Base Prudently:
  Maintain or modestly increase investment in tools and equipment to support operational capacity without overextending financially.

• Diversify Management and Skills:
  As the business grows, consider appointing additional directors or key personnel to reduce operational dependency on one individual. This is akin to having multiple doctors on call for complex cases.

• Enhance Financial Reporting and Planning:
  Though exempt from audit, establish robust internal financial controls, budgeting, and forecasting to anticipate cash flow needs and identify growth opportunities.

• Manage Credit Risk:
  Keep debtor levels under control and implement credit checks to avoid overdue payments affecting liquidity.

• Review Tax and Compliance:
  Ensure timely tax payments and compliance filings to avoid penalties that can strain finances.

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