SMB ELECTRICAL CONTRACTORS LIMITED
Company number 07003108 · 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: SMB ELECTRICAL CONTRACTORS LIMITED (07003108)
1. Credit Opinion: DECLINE
Reasoning: The company is technically insolvent with net liabilities of £26,249 and a working capital deficit of £40,699. Shareholders' funds have deteriorated persistently over a decade—from £87,180 in 2016 to negative territory in 2025—indicating sustained trading losses eroding the capital base. Current liabilities surged by £55,795 (59%) in the latest year while current assets remained flat, suggesting either creditor stretching, new borrowing, or unpaid obligations accumulating. The company lacks the balance sheet strength to absorb any further financial shock or reliably service additional debt obligations.
2. Financial Strength
Balance sheet is critically impaired and deteriorating.
| Metric | 2025 | 2024 | YoY Change |
|---|---|---|---|
| Net Assets | (£26,249) | £2,174 | (£28,423) |
| Shareholders' Funds | (£26,249) | £2,174 | (£28,423) |
| Current Liabilities | £149,763 | £93,968 | +£55,795 |
| Net Current Assets | (£40,699) | £13,675 | (£54,374) |
| Share Capital | £117 | £117 | — |
Key observations:
- Insolvency: Total liabilities exceed total assets by £26,249. The company cannot pay its debts if they fell due immediately.
- Decade-long equity erosion: Shareholders' funds have declined every year since 2016 (£87,180 → -£26,249), representing cumulative losses of approximately £113,000 over the period.
- Share capital is negligible at £117, providing zero cushion. The entire capital base has been consumed.
- Hire purchase commitments of £13,499 secured on assets reduce the realisable value of fixed assets.
- Micro-entity filing means no profit & loss account is available—profitability cannot be independently verified, though the consistent equity erosion confirms ongoing losses.
Long-term trend (Shareholders' Funds):
| Year | £ |
|---|---|
| 2016 | 87,180 |
| 2017 | 72,460 |
| 2018 | 77,980 |
| 2019 | 89,199 |
| 2020 | 46,946 |
| 2021 | 30,273 |
| 2022 | 13,909 |
| 2023 | 7,769 |
| 2024 | 2,174 |
| 2025 | (26,249) |
The trajectory is unbroken and accelerating downward.
3. Cash Flow Assessment
Liquidity position is severely compromised.
- Current ratio: £109,064 / £149,763 = 0.73x (down from 1.15x in 2024)
- Working capital deficit: £40,699 — the company owes £40,699 more in short-term debts than it holds in short-term assets
- Current liabilities increased 59% year-on-year without a corresponding increase in current assets, suggesting either:
- Trade creditors being stretched (payment arrears)
- New short-term borrowing to fund operations
- Accumulating tax liabilities (HMRC)
Cash flow concerns:
- The company is likely surviving through creditor forbearance or director support (director loans may be included within creditors)
- With only 3 employees (including the director), this is essentially an owner-operated business with minimal operational scale
- Fixed assets increased from £10,166 to £26,705, suggesting asset acquisition—possibly via the HP commitments noted—adding to cash flow pressure
- No information on debtor quality or cash conversion cycle is available given micro-entity filing
Sustainability risk: A business with negative working capital and negative net assets is entirely dependent on continued creditor tolerance and director involvement for survival.
4. Monitoring Points
If any credit exposure were already in place, the following require urgent attention:
| Metric | Current Position | Risk Threshold | Status |
|---|---|---|---|
| Net Assets | (£26,249) | Positive | ❌ BREACH |
| Working Capital | (£40,699) | Positive | ❌ BREACH |
| Current Ratio | 0.73x | >1.0x | ❌ BELOW |
| Shareholders' Funds Trend | 10-year decline | Stable/growing | ❌ DECLINING |
Key monitoring actions:
- CCJ and litigation checks — Essential given the insolvency position and creditor exposure
- Director disqualification search — Confirm Nathan Jenner has no disqualification records
- HMRC arrears — Investigate whether current liabilities include overdue VAT/PAYE
- Director loan account — Determine if amounts owed to the director are included within creditors (which may improve the position if subordinated)
- Trading outlook — Understand whether the FY2025 deterioration reflects a one-off event or ongoing structural decline
- Accounts filing — Current accounts are up to date (July 2025 year-end, filed April 2026), which is a positive compliance indicator
Additional Risk Factors
- Single-person control: Mr Jenner owns >75% of shares and is the sole director—concentrated key-person risk with no board oversight
- Micro-entity regime: Minimal financial disclosure obscures true trading performance and cash position
- No audit: Exempt under small companies regime; no independent verification of financial statements
- Industry risk: Electrical contracting is competitive and cyclical, often subject to payment delays from principal contractors