NMD CONSTRUCTION LTD

Executive Summary

NMD Construction Ltd exhibits a stable and growing balance sheet with positive net assets and reinvestment activity. However, recent significant declines in cash reserves and net current assets warrant careful liquidity monitoring. Credit approval is recommended on a conditional basis, requiring ongoing review of cash flow management and financial performance.

NMD CONSTRUCTION LTD - Analysis Report

Company Number: 13255611

Analysis Date: 2025-07-20 16:57 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   NMD Construction Ltd is an active private limited company operating in building completion, installation, and domestic construction since 2021. The company shows growth in fixed assets and net asset value over three years, indicating investment and some business expansion. However, the sharp decline in current assets and cash from £270k in 2024 to £140k in 2025, alongside a reduction in net current assets from £159k to £68k, raises some liquidity concerns. The company has no overdue filings and is managed by a single director-owner with significant control. Given the absence of audits and the modest scale, a credit facility could be extended but should be conditional on continued positive cash flow management and updated financial monitoring.

2. Financial Strength:
   The balance sheet shows net assets of £184k as of March 2025, down slightly from £198k in 2024 but still healthy relative to initial years. Tangible fixed assets increased from £23k in 2022 to £116k in 2025, primarily due to a £100k investment, suggesting reinvestment or capital expansion. Share capital remains nominal at £10, typical for small companies. The company’s equity is fully positive with no sign of accumulated losses reported, reflecting retained earnings. However, current liabilities fell from £111k in 2024 to £71k in 2025 which improves short-term solvency ratios, but cash reserves dropped from £220k to £82k, reducing liquidity buffers.

3. Cash Flow Assessment:
   Cash at bank decreased markedly by over 60% year on year, from £219,757 to £82,111, while trade debtors remained stable. Net current assets remain positive but have decreased substantially, driven by the cash reduction and lower current assets overall. The company maintains a positive working capital position (£68k) but the trend suggests tightening liquidity, which could impact the ability to service short-term obligations if cash inflows weaken. The absence of director loans is positive, indicating no immediate reliance on related-party funding. Monitoring of cash conversion cycles and timely debtor collections will be critical.

4. Monitoring Points:

• Liquidity trends, specifically cash and net current asset levels, to ensure the company maintains adequate short-term financial flexibility.
• Debtor aging and credit control effectiveness to avoid cash flow constraints.
• Impact of the £100k investment on operational performance and profitability in future periods.
• Continued compliance with filing deadlines and regulatory requirements.
• Management of working capital and any emerging credit facilities or external borrowings.