S B BUILDING SERVICES (REDDITCH) LIMITED

Executive Summary

S B Building Services (Redditch) Limited has demonstrated a marked balance sheet improvement since incorporation, moving from negative net assets to a modest positive position supported by fixed assets funded through hire purchase. The company’s liquidity remains tight with slight net current liabilities and low cash reserves. Credit approval is recommended on a conditional basis requiring ongoing monitoring of cash flow, working capital management, and debt servicing capability to mitigate early-stage operational risks.

S B BUILDING SERVICES (REDDITCH) LIMITED - Analysis Report

Company Number: 14013839

Analysis Date: 2025-07-19 12:13 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   S B Building Services (Redditch) Limited is a recently incorporated private limited company (March 2022) operating in the roofing and building completion sector. The latest accounts show a significant turnaround from the prior year, with net assets improving from a negative £21,447 to positive £1,949. This reflects successful capital injection and asset acquisition funded partly by hire purchase. However, the company still carries a small net current liability position (-£1,550), and hire purchase liabilities secured against fixed assets total £11,386. The business is small scale with only 2 employees and limited cash (£915). Given the early stage and modest liquidity, credit approval should be conditional on continued trading performance and improvement in working capital. Monitoring of cash flow and debt servicing capacity is essential.

2. Financial Strength:
   The balance sheet shows total fixed assets of £14,625, primarily financed through hire purchase agreements, indicating moderate leverage. Current assets of £10,311 comprise stock (£5,840), debtors (£3,556), and minimal cash. Current liabilities stand at £11,861, resulting in a slight net current liability. Additionally, there are medium-term liabilities of £8,347 and provisions of £2,779. Shareholders' funds have increased to £1,949 from a prior deficit, demonstrating some equity recovery. Overall, the company’s financial structure remains thinly capitalised but improving, with asset-backed financing mitigating some risk.

3. Cash Flow Assessment:
   Cash at bank is low at £915, suggesting limited liquidity buffers. Debtor levels are modest but represent a significant portion of current assets, so prompt collection will be critical. Stock holdings are relatively high for the size, which could pressure working capital if turnover slows. The hire purchase debt service will require regular cash outflows. The small negative net current asset position signals potential short-term liquidity constraints. Tight management of payables, receivables, and stock turnover is required to ensure the company can meet its short-term obligations.

4. Monitoring Points:

• Regular review of cash flow forecasts and debtor ageing to confirm collection efficiency.
• Monitoring stock levels relative to sales to avoid overstocking and obsolescence.
• Tracking hire purchase payment schedules and ensuring no defaults on secured debts.
• Observing profitability trends when full income statements become available to confirm sustainable earnings.
• Assessing any changes in director/shareholder control or related party transactions.