SELECT WORKS LIMITED

Executive Summary

Select Works Limited has demonstrated a notable recovery in net asset position and maintains regulatory compliance, indicating improving financial discipline. However, liquidity remains tight with marginal working capital, and significant long-term liabilities linger, warranting careful scrutiny of cash flow and solvency risk. Further due diligence on operational performance and creditor terms is advisable before investment consideration.

SELECT WORKS LIMITED - Analysis Report

Company Number: 13810941

Analysis Date: 2025-07-20 15:56 UTC

1. Risk Rating: MEDIUM
   The company has shown a material improvement in net assets from a negative £7,574 in 2022 to a positive £3,124 in 2023, indicating a recovery. However, liabilities after one year remain significant (£12,104) compared to fixed assets (£13,812), and current liabilities are close to current assets, pointing to tight liquidity.

2. Key Concerns:

• Liquidity Tightness: Current assets (£53,822) only marginally exceed current liabilities (£52,406), resulting in net current assets of just £1,416. This thin margin suggests limited buffer to meet short-term obligations comfortably.
• Long-Term Liabilities: Substantial creditors due after more than one year (£12,104) pose a solvency risk if cash flows do not improve or if refinancing is not available.
• Negative Historical Equity: The company carried negative shareholders’ funds (-£7,574) in 2022 and 2021, indicating prior losses and potential historic insolvency concerns that may affect creditworthiness and investor confidence.

3. Positive Indicators:

• Improved Net Assets: The turnaround to positive shareholders’ funds in 2023 signals progress in financial health.
• No Filing Overdues: Accounts and confirmation statements are up to date, reflecting regulatory compliance and governance discipline.
• Stable Management: The sole director and 75-100% owner remains consistent, reducing risks associated with governance disruption.

4. Due Diligence Notes:

• Review detailed cash flow statements and profit and loss information (not filed under micro entity exemptions) to better understand operational cash generation and profitability trends.
• Assess the nature and terms of long-term creditors to evaluate refinancing risk and covenant compliance.
• Investigate the causes and implications of historic negative equity, including any contingent liabilities or off-balance-sheet exposures.
• Confirm operational sustainability in the construction sector under SIC 42990, including client base stability and contract pipeline.