SAFE & PROTECT LTD
Company number SC354139 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
CREDIT ANALYSIS REPORT: SAFE & PROTECT LTD
1. CREDIT OPINION: APPROVE
Rationale: Safe & Protect Ltd presents a strongly favourable credit profile. The company demonstrates consistent and substantial growth in net assets over a sustained period, maintains an exceptionally low leverage position, and holds significant cash reserves. The 16-year trading history provides comfort regarding business viability, and the construction specialism (SIC 43999) aligns with ongoing infrastructure demand. Debt service capacity is clearly strong given the minimal existing liabilities and robust cash generation evidenced by retained earnings growth.
2. FINANCIAL STRENGTH
Balance Sheet Summary (Year Ending 31 January 2025):
| Metric | 2025 | 2024 | YoY Change |
|---|---|---|---|
| Total Assets | £2,551,993 | £2,094,493 | +21.8% |
| Net Assets | £2,162,949 | £1,706,643 | +26.7% |
| Cash | £713,850 | £495,281 | +44.1% |
| Retained Earnings | £2,162,849 | £1,706,543 | +26.7% |
Key Observations:
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Net Asset Growth: Shareholders' funds have grown from £643,716 (2016) to £2,162,949 (2025) – a 236% increase over nine years. This demonstrates sustained value creation.
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Leverage Position: Total liabilities of £215,072 against equity of £2,162,949 yields a gearing ratio of approximately 10%. This is exceptionally conservative and provides substantial capacity for additional borrowing.
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Capital Investment: Tangible fixed assets increased from £54,814 to £230,574, indicating recent capital expenditure – likely property or equipment expansion. This signals management confidence in future trading.
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Profitability Indicator: Retained earnings grew by £456,306 (from £1,706,543 to £2,162,849), representing the profit retained in the year. No dividend declarations are evident, suggesting profits are being reinvested.
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Asset Composition: The balance sheet is heavily weighted toward current assets (£2.29M), with debtors of £1.57M representing the largest single asset category. This requires scrutiny (see Monitoring Points).
3. CASH FLOW ASSESSMENT
Liquidity Position:
| Ratio | 2025 | 2024 | Assessment |
|---|---|---|---|
| Current Ratio | 10.7x | 15.2x | Excessive liquidity |
| Quick Ratio | 10.6x | 15.1x | Very strong |
| Cash/Current Liabilities | 3.3x | 3.7x | Comfortable coverage |
Working Capital: - Net current assets: £2,078,174 (2025) vs £1,878,700 (2024) – an increase of 10.6% - Working capital is more than sufficient to meet operational needs
Cash Generation: - Cash increased from £495,281 to £713,850 (+£218,569) despite significant capital investment in fixed assets - This indicates strong operating cash flow conversion - The company is self-funding its growth without external debt
Debt Service Capacity: - With minimal current liabilities (£215k) and no visible long-term debt (the £3,333 long-term creditor is negligible), the company has virtually unlimited capacity to service new debt obligations - Even a modest facility of £200-300k would be comfortably serviced from existing cash flows
4. MONITORING POINTS
| Risk Area | Concern | Mitigation/Action |
|---|---|---|
| Debtor Quality | £1.57M in debtors represents 61% of total assets. Concentration risk, aging, and collectibility should be verified. | Request aged debtor analysis. Monitor debtor days trend. Establish concentration limits if single customers exceed 20%. |
| Key Person Risk | Single director (Ewan Robertson) with control over 50-75% of shares and voting rights. | Consider key person insurance as a condition. Succession planning discussion warranted. |
| Construction Sector Cyclicality | Specialised construction (SIC 43999) is sensitive to economic cycles and public/private infrastructure spending. | Monitor order book and pipeline. Track sector-specific indicators. |
| Stock Levels | Minimal stock (£2,000) – confirm this is appropriate for the business model (likely service-led). | Verify business is not under-provisioning for contractual obligations. |
| Accruals/Deferred Income Decline | Accruals fell from £241,839 to £170,639. Understand whether this reflects normal timing or reduced future obligations. | Clarify nature of accruals on review. |
| Related Party Transactions | Family-controlled (Robertson family). Potential for transactions at non-arm's length. | Request disclosure of all related party balances. |
| Filleted Accounts | No P&L statement filed; profitability metrics are inferred only from balance sheet movements. | Consider requesting management accounts for full income statement visibility. |
ADDITIONAL NOTES
Management Quality Assessment: - Consistent profit retention and reinvestment over 16 years demonstrates disciplined financial stewardship - The decision to invest in fixed assets (£175k increase) while maintaining cash growth suggests strategic capital allocation - No history of adverse filings, disqualifications, or regulatory issues for the director - Accounts are filed on time with no overdue items
Sector Context: - Construction sector SMEs typically carry higher leverage; this company's near-zero debt position is unusual and favourable - The Scottish Borders location may limit the addressable market but also reduces competition intensity