LGR UTILITIES LTD

Executive Summary

LGR UTILITIES LTD shows a healthy financial start with positive working capital and net assets, reflecting good short-term liquidity and profitability in its first year. The company should focus on improving cash flow management and planning for growth-related investments to sustain and enhance financial wellness. Overall, the company demonstrates solid financial "vital signs" for a newly formed business in the utilities construction sector.

LGR UTILITIES LTD - Analysis Report

Company Number: 14837096

Analysis Date: 2025-07-29 16:41 UTC

Financial Health Assessment of LGR UTILITIES LTD (as of 31 March 2024)

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1. Financial Health Score: B

Explanation:
LGR UTILITIES LTD, a newly incorporated private limited company operating in construction of utility projects, shows good initial financial health with positive net assets and working capital. The company's balance sheet reveals a solid foundation with net current assets of £17,548 and net assets matching this amount, reflecting a stable equity base. However, as a first-year company with modest asset size and no history of employees, the financial data is limited. The absence of fixed assets or long-term liabilities and the reliance on current assets and shareholders’ funds indicate early-stage operational status with potential for growth.

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2. Key Vital Signs:

Metric	Value	Interpretation
Net Current Assets (Working Capital)	£17,548	Positive working capital suggests healthy short-term liquidity and ability to cover immediate liabilities without distress.
Current Assets	£28,189	Includes cash (£11,025) and debtors (£17,164). Cash is adequate but not excessive, indicating prudent cash management.
Current Liabilities	£10,641	Includes tax liabilities to HMRC (VAT, CIS, Corporation tax). These are manageable given current assets.
Net Assets / Shareholders' Funds	£17,548	Equity matches net current assets, showing no long-term debt. Indicates a clean balance sheet with no gearing risk.
Profit and Loss Account (Retained Earnings)	£17,546	Positive retained profit after dividends suggests profitability in the first year.
Share Capital	£2	Minimal capital invested; typical for a micro/small company start-up.
Average Number of Employees	0	No employees yet; possibly reliant on contractors or owner management.

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3. Diagnosis:

LGR UTILITIES LTD exhibits the "vital signs" of a financially stable start-up with no symptoms of distress such as negative working capital or excessive liabilities. The company’s positive retained profit (£17,546) after dividend payments reflects operational success in its first financial year. The current assets primarily consist of debtors and cash, indicating that cash flow is potentially tied to receivables collection cycles typical in project-based utility construction. The presence of tax liabilities (VAT, CIS, corporation tax) as current creditors is normal but needs careful monitoring to avoid cash flow pressure.

The lack of fixed assets or long-term debt suggests a lean operational model, possibly subcontracting work or using rented equipment, which minimizes financial risk but could limit scalability if not managed properly. The absence of employees implies the company is either owner-managed or uses external resources.

The company is classified as a small entity under the small companies regime, with minimal compliance burdens, which suits its current size and stage.

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4. Recommendations:

• Enhance Cash Flow Management:
  Monitor debtor aging closely to ensure timely collection of amounts due, maintaining healthy "cash flow pulse" crucial for ongoing operations, especially in construction projects where payment delays are common.

• Build Cash Reserves:
  While cash on hand is adequate, increasing reserves can provide a buffer against unexpected project delays or tax payments, ensuring the company remains "financially robust" under operational stress.

• Plan for Asset Investment:
  Consider investing in essential fixed assets or equipment to reduce dependency on subcontractors or rentals, which may enhance operational efficiency and reduce long-term costs.

• Tax Planning:
  Proactively plan for corporation tax and VAT payments to avoid last-minute liquidity crunches, addressing the "symptoms" of potential cash strain.

• Employee Strategy:
  Evaluate the need to hire key staff or skilled operatives to support growth, balancing labor costs with project demands to maintain a healthy cost structure.

• Growth and Scalability:
  Establish financial forecasting and budgeting to manage expansion, ensuring working capital scales with operational needs to avoid "overstretching" the company’s financial health.

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