Company Number: 12501042

Analysis Date: 2025-07-20 16:09 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Redbrooks Services Limited shows significant growth in net assets and fixed assets over the latest financial year, indicating investment and expansion. However, the substantial increase in current liabilities has led to a negative net current asset position (£-101,476), suggesting short-term liquidity pressure. The company is relatively young (incorporated 2020) and operates in a specialised construction sector, which can be cyclical. Current management appears stable with multiple directors and significant shareholder control, but monitoring working capital management is crucial. Credit can be extended with conditions focused on close monitoring of liquidity and receivables collection.

2. Financial Strength:

• Net assets grew from £47,263 in 2023 to £133,224 in 2024, a positive signal of equity build-up.
• Fixed assets increased sharply from £33,566 to £234,700 due to capital expenditure, likely reflecting investment in plant and motor vehicles. This supports operational capacity but is largely illiquid.
• Share capital remains nominal at £100, indicating limited initial equity injection; growth is driven by retained earnings or capital contributions.
• The company is classified as a small entity with total exemption full accounts filed and no overdue filings, indicating compliance and transparent reporting to date.

3. Cash Flow Assessment:

• Cash at bank fell significantly from £84,143 to £19,815 year on year, potentially signalling cash flow strain despite higher assets.
• Debtors increased markedly from £148,235 to £391,208, with other debtors forming a large portion (£339,390), which may require scrutiny for collectability risk.
• Current liabilities more than doubled to £537,862, including a large increase in other creditors and new taxation and social security liabilities (£100,846), which impacts short-term liquidity.
• Negative net current assets of £101,476 suggest the company may struggle to meet short-term obligations without improving cash conversion or additional financing.

4. Monitoring Points:

• Track debtor ageing and collection performance, especially the large "other debtors" balance.
• Monitor cash flow forecasts and working capital management to ensure liquidity cushions are adequate.
• Review creditor payment terms and tax obligations for any risks of default or penalties.
• Observe capital expenditure impact on operational cash flow and asset utilisation.
• Assess impact of sector cyclicality on turnover and margins, particularly given the specialised construction SIC codes.