REDCAP LIMITED

Executive Summary

Redcap Limited demonstrates progressive financial improvement with growing net assets and working capital, indicating enhanced creditworthiness since inception. However, the company’s modest capital base and significant tax liabilities relative to cash necessitate conditional approval with close monitoring of liquidity and tax obligations. Ongoing oversight of debtor collections and cash flow management will be critical to maintain financial stability in this small but growing construction business.

REDCAP LIMITED - Analysis Report

Company Number: 14162330

Analysis Date: 2025-07-20 15:49 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Redcap Limited shows clear growth from inception in 2022 through to the 2025 year-end, with net current assets improving significantly from £715 to £5,438 and shareholders’ funds increasing from £715 to £5,976. The company operates in the construction sector, a cyclical industry, which requires monitoring. The directors have recently expanded the board, indicating active management involvement. However, the company is relatively new and small, with modest fixed assets and limited capital (£9 share capital). The material increase in tax and social security creditors (£33,126) relative to cash (£12,260) suggests timing differences or potential cash flow strain. Therefore, credit approval is recommended but subject to conditions such as close monitoring of working capital and timely tax payments.

2. Financial Strength
   The balance sheet shows a positive trend in net current assets and shareholders' funds, reflecting retained earnings growth. Tangible fixed assets are low (£538), consistent with the company’s small size and industry. Current assets are primarily debtors (£27,935) and cash (£12,260), which covers current liabilities of £34,757, leaving a modest net working capital buffer of £5,438. The company’s total assets less current liabilities stand at £5,976. Overall, the financial position is stable but relatively lean, with limited asset backing and a small equity base.

3. Cash Flow Assessment
   The cash position at £12,260 is adequate to cover immediate obligations but with limited headroom given current liabilities of £34,757. Debtors have grown substantially, which may indicate extended credit terms or slower collections. Tax and social security liabilities are significant and require careful cash flow management to avoid defaults. The increase in net current assets suggests improving liquidity, but the company should ensure debtor collections and creditor payments are managed efficiently to maintain positive cash flow.

4. Monitoring Points

• Monitor debtor aging and collection efficiency to manage working capital.
• Track tax and social security payments closely to avoid arrears or penalties.
• Review cash flow forecasts regularly, especially given industry cyclicality.
• Watch for changes in directors or ownership that may affect governance or control.
• Confirm timely filing of accounts and confirmation statements to avoid compliance risks.