Company Number: 15549637

Analysis Date: 2025-07-20 16:49 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   SGHI Ltd is a newly incorporated company (March 2024) operating in the building completion and finishing sector (SIC 43390). The company shows modest net assets (£6,096) and negative net current assets (-£3,736) as at 31 March 2025. The presence of director loans (£6,028) classified as debtors and significant taxation and social security creditors (£11,741) indicate some liquidity constraints. The company has paid dividends (£39,000) which may strain cash resources. Given the short trading history, negative working capital, and reliance on director advances, approval for credit facilities should be conditional upon improved liquidity and more robust working capital management.

2. Financial Strength:
   The balance sheet shows total assets of approximately £24,161 (fixed assets plus current assets) funded by current liabilities of £16,395 and long-term liabilities of £1,670. The net asset position is positive but small (£6,096), reflecting the early stage of the company’s life. The intangible asset goodwill of £11,062 is significant relative to the total assets, which may not be readily realisable. Tangible assets are minimal (£440 net book value). The company’s equity is mostly retained earnings (£5,996), but the limited capital base (£100 share capital) and director loans indicate modest financial strength.

3. Cash Flow Assessment:
   Cash at bank is £5,299, which is low relative to current liabilities of £16,395, resulting in a negative net working capital position (-£3,736). Trade creditors are minimal (£61), but taxation and social security liabilities are high, suggesting potential cash flow timing pressures. The director loan of £6,028 is interest-free and repayable on demand, providing some flexible liquidity support. However, the payment of dividends totaling £39,000 in the first year indicates cash outflow that might impact liquidity. Overall, liquidity is currently constrained and should be closely monitored.

4. Monitoring Points:

• Working capital improvement: monitor current asset growth and reduction in current liabilities, especially tax and social security payments.
• Cash flow management: track monthly cash balances and timing of creditor payments to ensure liquidity.
• Director loan balances and any repayments or additional advances.
• Profitability trends once turnover data is available, to assess operational cash generation capacity.
• Dividend payments: ensure dividends do not impair liquidity or capital adequacy.