Financial Health Assessment: NEW HEIGHTS DEVELOPMENTS LIMITED

Financial Health Score: B+

Explanation: The company displays robust financial vitality with excellent liquidity reserves and a strong track record of equity accumulation. However, the significant increase in current liabilities and modest apparent profitability relative to asset base prevent a higher grade. Like a patient who is fundamentally healthy but showing some warning signs that require monitoring.

1. Key Vital Signs

2. Diagnosis: What the Financial Data Reveals

Healthy Signs - The Patient is Fundamentally Strong

Strong Pulse - Cash Flow Health: The company maintains an exceptional cash position of £189,869, representing approximately 72% of total assets. This is like having excellent cardiovascular fitness – the business can meet its obligations, seize opportunities, and weather economic storms. Cash has grown from just £4,189 in 2018 to nearly £190,000, demonstrating remarkable cash generation discipline.

Steady Growth - Equity Accumulation: Net assets have grown from £21,860 at incorporation (2017) to £149,144 in 2025 – a sevenfold increase over eight years. This consistent equity building shows the business has been profitable every year, retaining earnings rather than distributing them. The P&L reserve has grown from £21,760 to £149,044, a clear sign of accumulated profitability.

Solid Bone Density - Asset Foundation: Total assets have grown from £36,015 to £263,997, with a healthy mix of tangible fixed assets (£52,968) supporting the development operations and strong current assets.

Symptoms Requiring Attention - Warning Signs

Elevated Blood Pressure - Current Liabilities Surge: The most concerning symptom is the dramatic increase in current liabilities from £44,423 to £93,408 – a jump of nearly £49,000 (110%). This is like suddenly elevated blood pressure in an otherwise healthy patient. While the company can comfortably service these obligations (current ratio of 2.26), the rapid increase warrants investigation. In a property development context, this could indicate: - Trade creditors for ongoing development projects - Accruals for construction costs - Tax liabilities from profitable trading - Potentially, advance payments from property buyers

Swelling Inventory - Stock Increase: Stocks jumped from £5,000 to £21,027, suggesting work-in-progress on development projects. This is typical for property developers but represents capital tied up that needs to convert to cash through successful project completions.

Modest Profitability Relative to Scale: The P&L reserve increased by only £3,094 (£149,044 - £145,950), suggesting relatively modest retained profit for the year despite significant asset growth. This could indicate: - Projects in early stages with costs incurred but revenue not yet recognised - Significant depreciation charges on the asset base - A year of investment rather than harvest

Long-term Liabilities Growth: Creditors due after one year increased from £8,637 to £12,240, suggesting new financing arrangements – possibly vehicle or equipment finance given the additions to motor vehicles (£30,995 gross additions).

3. Long-term Health Trajectory

Historical Progression - The Patient's Medical History

The trajectory shows a company that has successfully navigated from startup through the pandemic to a position of financial strength. The pandemic year (2020) saw net assets barely grow, but the recovery has been impressive.

Future Outlook - Prognosis

Positive Indicators: - Exceptional cash reserves provide a substantial buffer - Consistent equity growth demonstrates sustainable business model - No signs of financial distress or insolvency risk - Filing compliance is excellent – accounts up to date - Small, controlled team (2 employees) keeps overheads low

Risk Factors: - Property development is inherently cyclical - The significant liability increase needs monitoring - Concentration of control (Ryan Scott Page owns 75%+, controls voting rights, and can appoint/remove directors) creates key-person dependency - Modest profit retention in 2025 suggests either investment phase or margin pressure

Overall Prognosis: Favourable with Monitoring. The company is in a strong financial position with excellent liquidity. The current liability increase is manageable but should be tracked. If this represents investment in new development projects, the company is well-positioned for future revenue generation.

4. Recommendations: Prescriptions for Financial Wellness

Immediate Actions

1. Monitor the Liability Increase: Investigate the £49,000 jump in current liabilities. Ensure this relates to legitimate business activity (development costs, trade creditors) rather than overdue obligations. Like monitoring elevated blood pressure, this needs regular check-ups.

2. Project Pipeline Management: With stock increasing significantly, ensure robust project management to convert work-in-progress into completed sales and cash. The £21,027 in stock needs to flow through to revenue efficiently.

3. Cash Deployment Strategy: With £189,869 sitting in cash, consider whether this is optimally deployed. In a rising interest rate environment, some of this could be earning returns, though maintaining a healthy reserve for development opportunities is wise.

Medium-term Considerations

4. Diversification of Revenue Streams: As a property developer, consider whether the business model allows for more predictable recurring income alongside project-based revenue.

5. Succession Planning: With Ryan Scott Page holding over 75% control and the company dependent on just 2 employees, formal succession planning and key-person insurance would be prudent risk management.

6. Profitability Analysis: While the company is clearly profitable over time, the modest P&L reserve increase in 2025 warrants a review of project margins and whether pricing adequately reflects risk and capital employed.

Ongoing Health Maintenance

7. Quarterly Financial Check-ups: Given the scale of current liabilities, more frequent monitoring of cash flow forecasts would be advisable.

8. Maintain Filing Discipline: The company has excellent compliance – continue this to maintain clean records and avoid penalties.

9. Consider Dividend Policy: With £149,044 in retained earnings and strong cash, the shareholders may wish to consider a formal dividend policy to balance reinvestment needs with shareholder returns.

Summary Assessment

Overall Grade: B+

The company is in robust financial health with excellent liquidity and a strong track record of equity accumulation. The primary area requiring attention is the significant increase in current liabilities, which, while manageable, should be monitored to ensure it represents productive business investment rather than financial strain. The business has demonstrated resilience through challenging economic conditions and is well-positioned for continued operation, though property development's cyclical nature requires ongoing vigilance.