R G WATERS LTD

Executive Summary

R G WATERS LTD is a small, single-director plumbing and heating business showing signs of declining net assets and moderate leverage via non-current liabilities. While currently compliant and operational, financial strength is limited, warranting conditional credit approval with close monitoring of liquidity and debt repayment capacity. The company's modest scale and capital base require cautious credit exposure.

R G WATERS LTD - Analysis Report

Company Number: 14128784

Analysis Date: 2025-07-19 12:54 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   R G WATERS LTD is a micro-entity operating in plumbing, heating, and air-conditioning installation, with one director who is also the sole significant controller. The company shows a decline in net assets from £6,273 in 2023 to £1,523 in 2024, indicating some financial pressure. Additionally, the company reports long-term creditors of £21,072 in 2024, which is significant relative to its net assets and could constrain cash flows. While the company is currently active and compliant with filings, the declining equity base and relatively tight working capital position warrant cautious lending with conditions such as periodic financial updates and monitoring of debt servicing.

2. Financial Strength:
   The company’s balance sheet reflects modest fixed assets (£14,817) and current assets (£20,234) as at May 2024. Current liabilities are relatively low at £11,856, yielding positive net current assets of £8,378. However, there are substantial non-current liabilities (creditors due after more than one year) at £21,072, which reduces total net assets to £1,523. The declining net equity over the last year indicates erosion of the company’s capital base. As a micro-entity with limited resources and a single employee (the director), the financial strength is modest and susceptible to external shocks or unexpected expenses.

3. Cash Flow Assessment:
   The company’s current asset composition is not fully detailed for 2024, but in 2023 cash was £13,387, comprising a significant portion of current assets, which supports liquidity. The positive net current assets position in 2024 suggests working capital management is adequate in the short term. However, the presence of long-term creditors and falling net assets may pressure future cash flows. Given the company’s small scale and single director operation, cash flow volatility risk exists, and ongoing liquidity should be monitored closely.

4. Monitoring Points:

• Track net asset trends and ensure no further erosion of shareholder funds.
• Monitor repayment of long-term creditors and any refinancing risk.
• Assess cash flow generation regularly, focusing on liquidity and working capital cycles.
• Watch for any delays in statutory filings or changes in director status.
• Review revenue and profitability trends, if available, to assess operational health.