LRD BUILDING SERVICES LIMITED

Executive Summary

LRD BUILDING SERVICES LIMITED exhibits symptoms of financial distress with negative net assets and working capital deficits, though it has achieved a marginal profit in 2023. The company’s financial health is fragile, necessitating urgent improvements in cash flow management, revenue growth, and equity restructuring to stabilize and strengthen its financial position.

LRD BUILDING SERVICES LIMITED - Analysis Report

Company Number: 13800436

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

Financial Health Assessment of LRD BUILDING SERVICES LIMITED

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1. Financial Health Score: D

Explanation:
The company shows signs of financial strain, with persistent negative net assets and working capital deficits over multiple years. While it is generating a small profit, the balance sheet reveals symptoms of distress such as liabilities exceeding assets and negative shareholder funds, indicating underlying financial weakness. The overall grade reflects concern but not imminent failure.

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2. Key Vital Signs

Metric	2023 Value	Interpretation
Turnover	£13,393	Very low revenue, indicating a micro-scale operation with limited sales.
Operating Profit	£85	Marginal operating profit, signaling very thin margins.
Net Current Assets	-£447	Negative working capital; short-term liabilities exceed short-term assets, a sign of liquidity stress or cash flow tightness.
Net Assets / Shareholders Funds	-£138	Negative equity indicates liabilities exceed total assets, a significant concern for financial stability.
Cash at Bank	£302	Low cash reserves relative to liabilities, limiting operational flexibility.
Debtors	£0 (2023)	Debtors fully collected or written off compared to prior year, which may affect future cash inflows.
Fixed Assets	£309	Small asset base, mostly office equipment, no indication of significant capital investment.

Vital Signs Interpretation:
The negative net current assets and net asset position are clear symptoms of financial distress akin to low blood pressure in a patient, suggesting the company’s financial "circulation" is weak. The very low turnover and operating profit indicate the business is barely sustaining itself. Cash reserves are minimal, providing little cushion for unexpected expenses.

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3. Diagnosis

LRD BUILDING SERVICES LIMITED is a very young micro-company operating in a niche business support service sector. The company has consistently operated with negative net assets and net current liabilities since inception, which is a chronic condition requiring close monitoring. Despite generating a small profit in 2023, the business remains in a fragile state with limited financial resilience.

The reduction of debtors to zero suggests tighter credit control or write-offs, but working capital remains negative due to ongoing liabilities, including a loan from the director. The balance sheet shows a shrinking fixed asset base due to depreciation without replacement, indicating no fresh investment in operational capacity.

The current financial state suggests the company is in a precarious condition, with symptoms such as negative equity and liquidity shortfall. However, the positive operating profit is a hopeful sign of some operational improvement or control over costs.

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4. Recommendations

• Improve Working Capital Management:
  Aim to reduce current liabilities or increase current assets. This might involve negotiating better payment terms with creditors or accelerating cash collections from customers if applicable.

• Increase Revenue and Gross Margin:
  Focus on business development to increase turnover beyond the current minimal level. Explore diversifying services or enhancing value propositions to improve profitability.

• Monitor Cash Flow Closely:
  Maintain a healthy cash flow to avoid liquidity crises. Consider establishing a cash buffer for operational needs.

• Address Negative Equity:
  The company should consider capital injection or restructuring liabilities to improve the net asset position, restoring financial health and investor confidence.

• Cost Control:
  Continue to scrutinize administrative expenses to ensure profitability is not eroded further.

• Director Loan Management:
  The loan from the director represents a risk; explore repayment plans or formalize terms to reduce uncertainty.

• Seek Professional Advice:
  Given persistent financial strain, consult with financial advisors or accountants for tailored strategic planning and possibly restructuring.

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Summary

LRD BUILDING SERVICES LIMITED is currently in a fragile financial state characterized by negative equity and working capital deficits, despite showing a modest profit. The company operates at a micro scale with limited cash reserves and ongoing liabilities outstripping assets. Immediate focus should be on improving liquidity, increasing revenue, and addressing negative shareholder funds to avoid deeper financial distress.