NEXT LEVEL SCAFFOLDING EAST LTD

Executive Summary

Next Level Scaffolding East Ltd shows signs of financial stabilization with a return to positive net assets in 2025, but working capital and liquidity remain weak with substantial current liabilities exceeding current assets. Credit approval is conditional on ongoing monitoring of cash flow, debtor collections, and creditor payments to ensure the company can meet short-term obligations. The company’s focused management and improving equity base support cautious optimism for credit extension with appropriate safeguards.

NEXT LEVEL SCAFFOLDING EAST LTD - Analysis Report

Company Number: 12616976

Analysis Date: 2025-07-20 18:08 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   NEXT LEVEL SCAFFOLDING EAST LTD is an active private limited company engaged in scaffold erection. The company shows signs of financial recovery in 2025 with positive net assets (£162) after two years of negative equity, indicating some improvement. However, net current liabilities remain significant at £31,273, and the working capital position is weak, suggesting liquidity stress. The directors’ conduct appears clean, and ownership is concentrated with a single controlling shareholder, which supports governance clarity. Credit approval is conditional on close monitoring of liquidity and trade receivables collection to ensure timely servicing of short-term obligations.

2. Financial Strength:
   The company’s balance sheet shows modest fixed assets (£31,435) primarily in plant, machinery, and motor vehicles, providing some tangible security. Shareholders’ funds have turned positive in the latest year after losses in prior years, but remain minimal (£162), reflecting a fragile equity base. Longstanding net current liability issues, although improved from the prior year, highlight ongoing working capital constraints. The small share capital (£1) is typical for a new SME but limits capital buffer. Overall, the financial position is recovering but remains weak, with limited margin for adverse trading conditions.

3. Cash Flow Assessment:
   Cash on hand is very low (£1,814), and current liabilities (£89,427) significantly exceed current assets (£58,154), resulting in negative net current assets. Debtors are substantial (£56,340), largely comprising CIS (Construction Industry Scheme) suffered amounts recoverable from HMRC, which can be a timing risk if delayed. The company employs only one person, indicating a lean cost base, but the high creditor balance and tax-related payables require vigilant cash flow management to avoid liquidity shortfalls. There is no indication of an overdraft or credit facilities disclosed, so access to external short-term funding should be verified.

4. Monitoring Points:

• Net current asset position and liquidity ratios, especially cash conversion cycle and debtor ageing
• Timely recovery of CIS suffered tax credits from HMRC
• Creditors’ aging and any increase in overdue payables or tax liabilities
• Continuation of positive net asset growth and profitability in future filings
• Any changes in director or ownership structure that could impact governance or control
• Potential impact of market conditions on contract completion and revenue recognition