Company Number: 12391443

Analysis Date: 2025-07-20 17:08 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   RGA UK Construction Limited is an active micro-entity operating in joinery installation with a stable registration history since 2020. The company shows moderate net assets and shareholder equity, but recent financials reveal a significant deterioration in liquidity, with net current liabilities of £41,463 as of January 2024 compared to net current assets in previous years. This indicates a working capital strain that could impair short-term payment capacity. The increase in fixed assets suggests investment in equipment or property, but the rise in current liabilities (from £54,664 to £177,306) is a concern. Directors include experienced joiners and a company director, but limited information is available on management financial strategy. Approval is possible if the company provides assurance on managing working capital and cash flow improvement plans.

2. Financial Strength:
   The balance sheet shows net assets of £37,682, slightly down from £40,116 the previous year, indicating stable but thin equity. Fixed assets increased significantly from £9,195 to £87,145, implying recent capital expenditure. However, this was accompanied by a sharp increase in current liabilities which have more than tripled to £177,306, leading to net current liabilities (working capital deficit) of £41,463. The company also carries £8,000 in long-term liabilities. Overall, the company has a modest capital base but weakened liquidity and a risk of short-term solvency issues if liabilities are not managed.

3. Cash Flow Assessment:
   Current liabilities exceeding current assets by £41k is a critical red flag on liquidity. This working capital deficit suggests the company may struggle to meet short-term obligations without additional financing or supplier credit. The lack of audit and detailed cash flow statements limits visibility but the trend over two years shows deterioration from a positive working capital position. The increase in average employees from 2 to 4 may also imply higher operational costs. Monitoring cash conversion cycle, debtor collection, and creditor payment terms will be essential.

4. Monitoring Points:

• Working capital position: monitor quarterly to detect improvements or further deterioration.
• Current liabilities trends: ensure no uncontrolled growth in short-term debt.
• Cash flow from operations: assess actual cash inflows versus outflows to confirm liquidity.
• Capital expenditure impact: verify that asset investments translate into revenue growth.
• Management actions: review any restructuring plans or financial support measures.