RH SURFACING LTD

Executive Summary

RH Surfacing Ltd, a recently established construction company, demonstrates a sound financial foundation with positive net assets and adequate working capital. The company’s liquidity depends heavily on debtor collection but currently shows no distress signals. Credit approval is recommended with regular monitoring of cash flow and debtor management to ensure ongoing financial health.

RH SURFACING LTD - Analysis Report

Company Number: SC759859

Analysis Date: 2025-07-29 12:32 UTC

1. Credit Opinion: APPROVE
   RH Surfacing Ltd is a newly incorporated private limited company operating in the construction sector specializing in road and motorway surfacing. The company shows a solid initial financial position with positive net assets and net current assets, indicating prudent financial management. Although it has a short trading history (approximately one year), the current data shows no signs of financial distress or liquidity issues. The sole director and 100% controlling shareholder demonstrates direct control and alignment of interests. Given the absence of adverse credit events, current compliance with filing obligations, and a positive working capital position, credit facilities can be approved with standard monitoring.

2. Financial Strength:

• Fixed assets stand at £12,560, representing initial investment in tangible assets (plant, machinery, vehicles, equipment), appropriate for a construction business.
• Current assets total £28,204, primarily debtors (£27,998) with minimal cash (£206), reflecting that most current assets are receivables.
• Current liabilities are £15,879, resulting in net current assets of £12,325, which is a comfortable working capital buffer.
• Net assets and shareholders’ funds of £24,885 reflect all liabilities being covered by assets, showing a stable equity base for a new company.
• The company’s capital is minimal (£100), with retained earnings providing the bulk of equity, indicating initial profitability or capital injection beyond nominal share capital.

3. Cash Flow Assessment:

• The low cash balance (£206) is typical for a young, asset-heavy business with a high debtor balance, implying reliance on timely collection of receivables for liquidity.
• Positive net current assets suggest short-term obligations can be met without stress, but there is a concentration risk on debtor collection.
• No indication of overdraft or short-term borrowing is provided, suggesting no immediate liquidity strain.
• The company should maintain focus on efficient debtor management to ensure ongoing cash inflows.

4. Monitoring Points:

• Track debtor aging and collection efficiency to avoid cash flow bottlenecks.
• Monitor trade payables and current liabilities to prevent liquidity mismatches.
• Watch turnover growth and profitability trends in subsequent accounts to assess business scaling and sustainability.
• Confirm ongoing compliance with filing deadlines to mitigate regulatory or reputational risks.
• Observe any changes in director or ownership structure that could affect governance and creditworthiness.