RSP BUILDING & DEVELOPMENT LTD

Executive Summary

RSP Building & Development Ltd shows a solid asset base but is currently experiencing a working capital deficit with reduced cash reserves, which raises caution over short-term liquidity. The company’s financials warrant conditional credit approval with close monitoring of cash flow and creditor management. Continued operational performance and improved liquidity will be key for sustained creditworthiness.

RSP BUILDING & DEVELOPMENT LTD - Analysis Report

Company Number: 13126680

Analysis Date: 2025-07-20 12:32 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   RSP Building & Development Ltd is a relatively new private limited company operating in the construction sector. The latest accounts show a deterioration in net current assets, moving from a strong positive position (£418k) to a net current liability (£13.6k), primarily due to increased current liabilities rising faster than current assets. Cash reserves have dropped significantly from £771k to £421k, which could pressure liquidity. While the company holds substantial fixed assets (£346k), the working capital deficit signals potential short-term cash flow constraints. The change in directorship in early 2023 may warrant monitoring but does not currently indicate governance concerns. Given these factors, credit approval is possible but should be conditional on close monitoring of liquidity and operational cash flow.

2. Financial Strength:
   The balance sheet shows total assets less current liabilities of £332.5k, down from £459.6k the previous year, reflecting investment in fixed assets (£315k in land and buildings, added in 2023/24). Shareholders’ funds have decreased from £459.6k to £332.5k, indicating a decline in retained earnings or profitability. The company’s fixed assets now constitute a large portion of its net assets, which reduces financial flexibility. The absence of long-term liabilities reported suggests limited gearing, which is positive. Overall, the financial structure is moderately strong but weakened by the reduced liquidity and working capital deficit.

3. Cash Flow Assessment:
   Cash on hand has halved year-on-year, from £771k to £421k, signaling reduced liquid resources. Debtors remain minimal (£8.3k), which lowers risk of delayed inflows, but current liabilities have increased to £443k, surpassing current assets. This working capital deficit could restrict the company’s ability to meet short-term obligations without additional financing or improved cash conversion. Given the construction industry’s typical project-based cash flow timing, maintaining adequate liquidity is critical. Monitoring cash flow forecasts and ensuring timely payment collections will be essential.

4. Monitoring Points:

• Liquidity ratios and working capital position to detect any worsening cash flow pressures.
• Timely payment of current liabilities to avoid supplier or creditor disputes.
• Profitability trends and reserves movement in future accounts filings to confirm financial recovery.
• Impact of the fixed asset investments on operational capacity and cash flow generation.
• Director changes and any new governance or strategic decisions affecting credit risk.