PRL SITE SOLUTIONS LTD

Executive Summary

PRL Site Solutions Ltd has shown impressive growth and improved financial metrics in its second year of operations, with strong net asset growth and adequate liquidity. The company is capable of servicing its current liabilities and finance leases, though the significant increase in trade debtors requires careful cash flow management. Overall, credit approval is recommended with ongoing monitoring of debtor collections and working capital management.

PRL SITE SOLUTIONS LTD - Analysis Report

Company Number: 14358717

Analysis Date: 2025-07-29 20:18 UTC

1. Credit Opinion: APPROVE with conditions
   PRL Site Solutions Ltd demonstrates strong growth and improving financial health in its second full year of trading. The company’s significant increase in current assets, particularly trade debtors and cash balances, supports its ability to meet short-term obligations. However, given the company’s young age and relatively high current liabilities, ongoing monitoring of cash collection and working capital management is recommended. The presence of finance lease obligations requires attention but is manageable given current asset coverage.

2. Financial Strength:
   The company shows a robust balance sheet improvement between 2023 and 2024. Net assets increased from approximately £10k to £225k, reflecting retained earnings growth and increased tangible assets. Fixed assets grew substantially due to capital expenditure on motor vehicles and fixtures, supporting operational capacity expansion. The company maintains a positive net current asset position (£172k), indicating short-term liquidity is adequate despite a large increase in current liabilities. Deferred tax provision (£9k) and finance lease liabilities (£28k) are noted but not excessive relative to equity.

3. Cash Flow Assessment:
   Cash at bank rose significantly to £316k as of 30 September 2024, providing a comfortable liquidity buffer. Trade debtors increased markedly to £706k, which requires careful monitoring to avoid cash flow strain from delayed collections. Current liabilities of £850k include taxation and social security of £380k, indicating recent profitability but also a potential upcoming cash outflow. Finance lease payments totaling £28k over the next five years are manageable given the cash and asset base. Overall, the company’s working capital position suggests it can meet short-term debts, but the high debtor balance warrants close attention.

4. Monitoring Points:

• Trade debtor aging and collection efficiency to ensure cash inflows remain timely.
• Tax and social security payments due, ensuring adequate cash flow for settlement.
• Lease obligation serviceability aligned with operational cash generation.
• Continued profitability and retention of earnings to build equity and reduce reliance on external finance.
• Impact of capital expenditure on operational performance and cash flow generation.