PURE DESIGN AND BUILD LTD

Executive Summary

PURE DESIGN AND BUILD LTD is currently facing significant financial distress, with negative working capital and net assets indicating liquidity and solvency challenges. Immediate cash flow management and liability restructuring are critical to stabilize the business and prevent insolvency. With focused financial discipline and potential equity support, the company can recover its financial health over time.

PURE DESIGN AND BUILD LTD - Analysis Report

Company Number: 14131204

Analysis Date: 2025-07-29 12:55 UTC

Financial Health Assessment of PURE DESIGN AND BUILD LTD

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1. Financial Health Score: D

Explanation:
The company’s financial condition shows significant distress signals with negative net assets and working capital in the latest financial year. This grade reflects a concerning financial position that requires urgent attention to avoid further deterioration.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	33,792	0	Investment in long-term assets increased, indicating business development or capital expenditure.
Current Assets	59,318	25,636	Increase in liquid and short-term assets, showing some growth in resources available soon.
Current Liabilities	165,570	23,660	Sharp rise in short-term obligations, a major red flag suggesting liquidity stress.
Net Current Assets (Working Capital)	-106,252	1,976	Negative working capital indicates inability to cover short-term debts with current assets.
Net Assets (Shareholders’ Funds)	-72,460	1,976	Negative equity signals that liabilities exceed assets, reflecting potential insolvency symptoms.

Interpretation of Vital Signs:

• The company’s working capital has moved from positive to deeply negative, akin to a patient whose vital signs have shifted from stable to critical. This suggests the company may struggle to meet its short-term liabilities as they fall due.
• The net liabilities situation shows the company’s balance sheet is “unhealthy,” with liabilities surpassing assets, which could impede future borrowing and operational capacity.
• The rise in current liabilities is the most alarming symptom, indicating possible overdue payments or increased short-term borrowing.
• The increase in fixed assets and current assets suggests the business is investing and growing, but the corresponding liabilities have outpaced this growth, creating distress.

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3. Diagnosis: Financial Condition Assessment

PURE DESIGN AND BUILD LTD has shown a rapid deterioration in financial health over the past year. The company’s balance sheet now reflects a state of financial distress:

• The negative working capital is a symptom of cash flow problems, indicating the company may be relying heavily on creditors or short-term financing to fund operations.
• The negative net assets indicate the company’s liabilities outweigh its assets, which is a critical condition that could lead to insolvency if not managed.
• The absence of audit (due to micro-entity exemption) means some financial risks might be underreported, but the current data clearly show financial strain.
• The company is still active and has no overdue filings, which is a positive sign that management is maintaining statutory compliance despite financial difficulties.
• The business has only two employees (including directors), which suggests a small operational scale but the liabilities are disproportionately high relative to the business size.

The overall diagnosis could be likened to a patient with a serious but potentially reversible condition — urgent intervention is needed to stabilize cash flow and reduce liabilities.

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4. Recommendations: Path to Financial Wellness

Immediate Actions:

• Improve Cash Flow Management: Prioritize collection of receivables and negotiate extended payment terms with suppliers to ease liquidity pressure. Consider short-term financing with manageable costs if necessary.
• Cut or Delay Non-Essential Expenditures: Review capital expenditure plans. Delay any non-critical asset purchases to conserve cash.
• Restructure Debt: Engage with creditors to restructure or reschedule payment terms to avoid defaults and potential insolvency procedures.
• Increase Equity Injection: Consider capital injection from shareholders or new investors to restore positive net assets and strengthen the balance sheet.

Medium to Long-Term:

• Enhance Profitability: Review pricing, cost control, and project management to improve margins and generate sustainable cash flows.
• Monitor Financial Health Regularly: Implement monthly cash flow forecasts and management accounts to detect early symptoms of financial distress.
• Strategic Business Review: Evaluate business model and market positioning to ensure future revenue growth and financial stability.

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