Investment Risk Analysis: Q-Build Maintenance (UK) Limited

1. Risk Rating: MEDIUM-HIGH

The rating reflects a company demonstrating significant revenue growth but carrying substantial balance sheet risk. Total liabilities (£527,546 including provisions) nearly equal total assets (£532,879), leaving a dangerously thin equity buffer of just £72,694. The company's liquidity position is almost entirely dependent on the collectability of a large trade debtors book, while cash reserves have deteriorated. The unexplained explosion in "other creditors" from £4,205 to £286,526 raises material concerns about the nature and terms of these obligations.

2. Key Concerns

Concern 1: Trade Debtors Concentration and Collectability Risk

Trade debtors stand at £444,217, representing 83% of current assets and nearly matching total liabilities. This figure has increased 88% from £236,029 in the prior year. The company's ability to meet its obligations rests almost entirely on collecting these receivables. If even 15-20% of this book proves uncollectible, the company would face severe liquidity stress. No provision for bad debts is visible in the accounts.

Concern 2: Unexplained Surge in Other Creditors

Other creditors have increased from £4,205 to £286,526 — a 6,717% increase year-on-year. This single line item now represents 59% of total liabilities. The filed accounts provide no breakdown or explanation for this balance. Given the single-director ownership structure (Mr Little holds >75% of shares), this could represent director lending, related-party financing, or potentially obligations with onerous terms. Without disclosure, this represents a significant opacity risk.

Concern 3: Deteriorating Cash Position Despite Asset Growth

Cash at bank has fallen from £10,139 to £5,696 — a 44% decline — despite total assets growing 63% and trade debtors nearly doubling. This suggests the business is not converting revenue into cash effectively. With only £5,696 available against £486,809 in current liabilities, the immediate liquidity coverage ratio is approximately 0.012:1, which is critically low. The company is entirely dependent on timely debtor collection to service its obligations.

3. Positive Indicators

• Revenue Growth Indicated: The substantial increase in trade debtors and total assets (from £326,566 to £532,879) suggests significant business expansion and increased contract activity.

• Net Assets Strengthening: Shareholders' funds have grown from £31,154 to £72,694 (133% increase), indicating retained profitability. The retained earnings figure of £72,693 (against £1 share capital) demonstrates the business has generated and retained profits over time.

• Regulatory Compliance: Accounts and confirmation statements are filed on time with no overdue items. The company has maintained Active status since 2009 — a 16-year operating history.

• Positive Working Capital: Net current assets improved from (£26,884) to £46,070, moving from a deficit to a surplus position.

• Tangible Asset Base: The company holds £67,361 in fixed assets including freehold property (£11,851 NBV) and motor vehicles (£40,807 NBV), indicating operational substance.

4. Due Diligence Notes