MURPHY SCAFFOLDING LIMITED

Executive Summary

Murphy Scaffolding Limited exhibits significant liquidity constraints with negative net current assets and minimal cash reserves despite being compliant with regulatory filings. The company’s financial leverage and short operating history heighten solvency risks. Close scrutiny of cash flow management and debt obligations is recommended before considering investment.

MURPHY SCAFFOLDING LIMITED - Analysis Report

Company Number: 13952507

Analysis Date: 2025-07-20 14:58 UTC

1. Risk Rating: HIGH
   The company shows a declining liquidity position with net current liabilities in the latest year, low cash reserves, and a marginal net asset base. These factors indicate a heightened risk of solvency and cash flow challenges, especially given its short operating history.

2. Key Concerns:

• Negative net current assets (£-10,097) as of 31 March 2024, indicating potential short-term liquidity stress.
• Very low cash balance (£243), which severely limits the company's ability to meet immediate obligations.
• Significant reliance on hire purchase contracts and bank loans, with substantial amounts falling due after one year (£12,418) and within one year (£15,662), increasing financial leverage risk.

3. Positive Indicators:

• The company remains active and compliant with filing deadlines for accounts and confirmation statements, reflecting good governance practices.
• Ownership and control are concentrated in a single director (Mr Danny Murphy), which may facilitate swift decision-making and operational control.
• Tangible fixed assets are reasonably steady (£28,047), indicating some investment in operational capacity relevant to its scaffolding business.

4. Due Diligence Notes:

• Investigate reasons behind the sharp reduction in debtors from £30,314 to £16,055 and whether this impacts revenue stability or reflects collection issues.
• Assess the terms and conditions of hire purchase contracts and bank loans to understand repayment schedules and refinancing risks.
• Evaluate the company’s cash flow forecasts and working capital management plans to address current liquidity shortfalls.
• Confirm the absence of contingent liabilities or off-balance sheet risks not disclosed in the accounts.
• Review the director’s strategy for improving profitability and solvency given the marginal net asset position (£203).