PRECISION SUBSTRUCTURES LIMITED

Executive Summary

Precision Substructures Limited is a recently established construction business with a modest equity base and positive but tight net current assets. While liquidity is supported by trade debtors and cash, current liabilities are significant, implying moderate risk in servicing short-term obligations. Conditional credit approval is recommended with close monitoring of cash flows and debtor collections to mitigate liquidity risk.

PRECISION SUBSTRUCTURES LIMITED - Analysis Report

Company Number: 15238177

Analysis Date: 2025-07-20 17:56 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Precision Substructures Limited is a newly incorporated private limited company (incorporated Oct 2023) operating in construction of domestic and commercial buildings. The company shows modest net current assets (£25.6k) against current liabilities of £455.9k, with a positive cash balance (£62k) and significant debtors (£419.6k). The directors hold equal significant control and reside locally, which supports governance stability. However, the company’s financial history is very limited, and working capital is tight relative to liabilities, indicating moderate liquidity risk. Approval is conditional on monitoring cash flow closely and obtaining additional security or guarantees if extending significant credit or loan facilities.

2. Financial Strength:
   The balance sheet reveals a small equity base (£25.6k), reflecting early stage operations. The company’s current assets primarily comprise trade debtors, which represents amounts expected to be collected from customers. Fixed assets are not reported, indicating minimal long-term asset investment to date. Current liabilities are high (£455.9k), mainly trade creditors, accruals, and tax obligations. The small positive net current assets indicate a fragile working capital position. Overall, the company’s financial strength is limited by its infancy and low capitalisation, but no adverse solvency signals are apparent.

3. Cash Flow Assessment:
   Cash at bank is £61,989, which provides some liquidity cushion. However, current liabilities are nearly 7.3 times the cash balance, relying heavily on timely collection of debtors (£419,573) to meet obligations. Debtors are high, suggesting substantial ongoing contracts or receivables. The company’s cash flow is likely to be cyclical and dependent on contract payments. Working capital is positive but narrow, so any delays in debtor payments or cost overruns could strain liquidity. Close attention to debtor ageing and creditor payment terms is recommended.

4. Monitoring Points:

• Debtor collection performance and ageing to assess cash inflow reliability
• Trends in current liabilities, especially accruals and tax obligations
• Profitability and cash generation once profit and loss accounts are available
• Any increase in bank borrowings or overdrafts impacting liquidity
• Directors’ actions on capital injections or external financing to strengthen equity
• Contract pipeline and risks of cost overruns or delayed payments