MF GROUP CONSTRUCTION LTD

Executive Summary

MF GROUP CONSTRUCTION LTD exhibits a concerning financial position as of its latest accounts with negative net assets and working capital deficits, indicating elevated solvency and liquidity risks. While the company remains compliant with statutory filings and has consistent management, the financial deterioration signals potential operational and financial sustainability challenges that warrant further detailed investigation.

MF GROUP CONSTRUCTION LTD - Analysis Report

Company Number: 13226060

Analysis Date: 2025-07-29 12:10 UTC

1. Risk Rating: HIGH
   Justification: The company has reported a significant deterioration in net assets, moving from positive equity of £7,308 as of 2023 to a net liability position of £-20,231 as of 2024. Current liabilities have nearly doubled while current assets have increased but insufficiently to cover short-term obligations, resulting in negative working capital of £-22,428. These factors signal potential solvency and liquidity risks.

2. Key Concerns:

• Solvency risk: Negative net assets and shareholders’ funds indicate the company is technically insolvent on a balance sheet basis as at 29 February 2024.
• Liquidity issues: Current liabilities are £86,236 against current assets of £62,558, resulting in negative net current assets (working capital), which raises concerns about the company’s ability to meet short-term obligations as they fall due.
• Operational sustainability: The company has only two employees and a very low share capital (£2), suggesting a small operational base. Combined with the deteriorating financial position, this may affect the company’s ability to continue as a going concern without new capital or improved cash flow.

3. Positive Indicators:

• The company is still active and compliant with filing deadlines, with no overdue accounts or confirmation statements noted.
• The director has maintained control since incorporation, indicating continuity of management.
• The company operates in a defined niche within construction (building completion, plumbing, electrical installation), which may offer some resilience if market demand persists.

4. Due Diligence Notes:

• Examine cash flow statements and turnover figures (not provided) to assess operational cash generation and clarify the reasons behind the jump in current liabilities.
• Investigate creditor composition and payment terms to assess whether liabilities are overdue or likely to cause enforcement action.
• Review management’s plans or notes for addressing the negative net asset position and liquidity shortfall, including any capital injections or restructuring efforts.
• Verify the identity and background of the director, including any related party transactions or potential conflicts of interest.
• Confirm absence of any regulatory or legal proceedings given the financial distress indicators.