R BUILDING MAINTENANCE LTD

Executive Summary

R Building Maintenance Ltd has shown financial improvement in its second full year with positive net assets and working capital, supported by director funding. However, dependence on an interest-free director loan and dividend payments amidst modest profits introduce liquidity and operational risks. Continued monitoring of working capital management and cash flow sustainability is recommended to mitigate solvency concerns.

R BUILDING MAINTENANCE LTD - Analysis Report

Company Number: 14329570

Analysis Date: 2025-07-20 15:39 UTC

1. Risk Rating: MEDIUM
   R Building Maintenance Ltd demonstrates improving financial stability with positive net current assets and net assets as of 30 September 2024, recovering from negative net working capital in the prior year. However, the company remains small with modest fixed assets and has a significant director’s loan account balance, indicating potential liquidity pressure and reliance on insider funding.

2. Key Concerns:

• Director Loan Exposure: The company owes over £21,000 to its director, which is interest-free and repayable on demand. This reliance on director advances may mask underlying cash flow difficulties.
• Volatile Debtor and Creditor Balances: A sharp reduction in trade debtors from £13,460 to zero while current liabilities decreased significantly suggests changes in working capital management that require verification for sustainability.
• Dividend Payments Despite Modest Profits: Dividends totalling £5,000 were paid in the year, which could strain liquidity given the company’s small scale and prior year net current liability position.

3. Positive Indicators:

• Improved Working Capital Position: The company moved from a net current liability position (-£6,312) in 2023 to a positive net current asset position (£3,181) in 2024.
• Consistent Filing and Compliance: No overdue accounts or confirmation statements, indicating good regulatory compliance since incorporation in 2022.
• Stable Ownership and Management: Single director and majority shareholder Mr. Rafal Kapera has maintained continuous control since incorporation, providing stable governance.

4. Due Diligence Notes:

• Investigate the nature and terms of the director’s loan account and any plans for repayment or restructuring.
• Clarify the cause and sustainability of changes in debtor and creditor balances, especially the disappearance of trade debtors.
• Review the company’s cash flow forecasts and liquidity management to assess its ability to meet short-term obligations without further director advances.
• Confirm the rationale and affordability of dividend payments in the context of the company’s profitability and cash position.
• Assess the impact of the company’s dual SIC codes (management consultancy and building finishing) on revenue diversification and operational risk.