Company Number: 13739761

Analysis Date: 2025-07-29 13:22 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   SGB Drainage Limited, a micro private limited company incorporated in late 2021, shows modest but improving financial health. The company's net assets nearly doubled from £10.7k in 2023 to £19.7k in 2024, indicating capital injection or retained earnings growth. However, current liabilities remain high relative to current assets, though there was a significant improvement in net current assets from a negative £12.1k to a positive £348. Given the company’s young age, small scale, and limited employee base (one employee), credit should be extended cautiously with conditions such as regular financial monitoring and limits on exposure until further financial stability is demonstrated.

2. Financial Strength:

• Fixed assets decreased from £33.9k to £26.8k, possibly due to disposals or depreciation, but this is not critical given the company’s size.
• Current assets increased substantially (from £8.6k to £22.9k), largely improving liquidity.
• Current liabilities remain high but have not increased significantly (£22.5k vs. £20.7k).
• Net current assets turned positive, a key improvement for short-term solvency.
• Net assets improved to £19.7k, showing an enhanced equity base.
  Overall, the balance sheet is modest but stable with improvements year over year, suitable for limited credit risk exposure.

3. Cash Flow Assessment:

• The company’s current asset to current liability ratio is slightly above 1 (22.9k/22.5k), indicating marginally positive working capital.
• The net current assets at £348 show very thin liquidity buffers, so cash flow management must be monitored closely.
• The micro-entity exemption from audit means less detailed financial scrutiny; thus, cash flow forecasts and bank statements should be reviewed regularly.
• Given the company employs only one person and operates in sewerage services, operating cash flows could be limited and volatile depending on contract timing.

4. Monitoring Points:

• Watch the trend in current liabilities versus current assets to ensure continued positive working capital.
• Monitor cash flow monthly due to thin liquidity buffers.
• Review turnover and profitability trends as they emerge in future filings to confirm sustainable operations.
• Keep an eye on director conduct and any changes in ownership or control that could impact governance.
• Ensure compliance with filing deadlines continues to avoid penalties and maintain transparency.