NLC BUILDINGS LIMITED

Executive Summary

NLC BUILDINGS LIMITED exhibits significant solvency and liquidity concerns with negative net assets and working capital deficits as per the latest micro-entity accounts. While regulatory filings are current and operational staffing stable, the financial position suggests elevated risk requiring further investigation into cash flow, accruals, and management strategy. Prospective investors should exercise caution and seek detailed financial disclosures before engagement.

NLC BUILDINGS LIMITED - Analysis Report

Company Number: 13587999

Analysis Date: 2025-07-20 11:55 UTC

1. Risk Rating: HIGH

Justification: The latest micro-entity accounts reveal net liabilities (negative net assets) as of 31 August 2024, indicating solvency concerns. The company’s current liabilities exceed current assets, and total net assets are negative, flagging potential financial distress. Additionally, the small scale of operations and limited asset base increase vulnerability to cash flow issues.

2. Key Concerns:

• Negative net assets: The balance sheet shows net liabilities of £4,475 in 2024, worsening from £5,061 net assets in 2023 (noting possible transcription issues in the document, but net assets appear negative in 2024). This suggests erosion of shareholder value and potential insolvency risk.
• Working Capital Deficit: Current liabilities (£27,064) exceed current assets (£24,482), yielding negative net current assets (-£2,582) at year-end 2024, indicating liquidity strain to meet short-term obligations.
• Accruals and Deferred Income: Significant accruals and deferred income of £7,588 are recorded, which may mask underlying cash flow pressures if these represent liabilities or unearned income that will impact future periods.

3. Positive Indicators:

• Compliance: The company is up to date with both accounts and confirmation statement filings, with no overdue returns, reflecting regulatory compliance.
• Stable Staffing: The average number of employees remained steady at 3 for the past two years, suggesting operational continuity.
• Directors and Control: The company has stable management with two directors appointed since incorporation, and no indications of director disqualification or governance issues.

4. Due Diligence Notes:

• Clarify the apparent discrepancy in net asset figures between 2023 and 2024 accounts; the 2024 balance sheet shows negative net assets whereas 2023 shows positive values—verify accuracy and context.
• Review the nature and terms of accruals and deferred income totaling £7,588 to assess timing and certainty of cash outflows or revenue recognition.
• Assess cash flow statements and P&L (not provided here) to understand operational cash generation and profitability trends.
• Investigate any contingent liabilities or off-balance sheet commitments that could exacerbate financial risk.
• Evaluate management plans for addressing liquidity shortfalls and restoring positive net asset position.