SOUTH EAST ROOFING AND CLADDING LIMITED

Executive Summary

South East Roofing and Cladding Limited is a young company showing positive financial foundations with a solid equity base and working capital. However, low cash reserves and zero employees highlight operational and liquidity challenges typical of early-stage businesses. With focused cash flow management and strategic scaling, the company has the potential to strengthen its financial health and ensure sustainable growth.

SOUTH EAST ROOFING AND CLADDING LIMITED - Analysis Report

Company Number: 15270998

Analysis Date: 2025-07-19 13:04 UTC

Financial Health Assessment for SOUTH EAST ROOFING AND CLADDING LIMITED

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1. Financial Health Score: B-

Explanation:
The company shows early signs of financial stability with positive net assets and net current assets, indicating a "healthy cash flow" position relative to liabilities. However, as a newly incorporated entity with limited operational history and modest asset base, it carries inherent risks typical of startup ventures. The absence of employees and minimal cash reserves signal cautious liquidity management but require attention to sustain growth.

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2. Key Vital Signs (Financial Metrics and Interpretation)

Metric	Value (£)	Interpretation / "Vital Sign" Diagnosis
Current Assets	17,062	Indicates short-term resources including cash and receivables. Moderate level for a new company.
Cash at Bank	265	Very low cash balance; "symptom of tight liquidity" needing monitoring to avoid cash crunch.
Debtors	16,797	High proportion of current assets tied up in receivables; risk if collections slow.
Current Liabilities	8,423	Short-term debts mainly taxes and social security; manageable relative to assets.
Net Current Assets	8,639	Positive working capital; "healthy buffer" to meet short-term obligations.
Fixed Assets (Net)	3,000	Investment in plant & machinery; necessary for operational capacity.
Net Assets	11,639	Positive equity base; company is solvent with assets exceeding liabilities.
Shareholders’ Funds	11,640	Reflects owner’s investment and retained earnings (though minimal trading history).
Employees	0	No staff employed yet; implies reliance on owner or subcontractors; may limit operational capacity.

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3. Diagnosis: Financial Health and Business Condition

• Liquidity and Working Capital: The company maintains a positive net current asset position, signifying it can cover its immediate debts. However, the extremely low cash balance (£265) is a "red flag symptom" for potential liquidity stress if payments from debtors are delayed.

• Asset Structure: Tangible fixed assets are modest but appropriate for start-up operations in roofing and cladding, indicating initial investment in essential equipment.

• Profitability and Reserves: No profit and loss figures were disclosed yet, but the profit and loss reserve aligns with the initial capital injection, implying limited trading activity so far.

• Operating Capacity: No employees are recorded, which suggests the company may be relying on the director or subcontractors. This limits scalability and operational bandwidth but is common in early stages.

• Control and Governance: The single director and 75-100% ownership concentration provide clear control but also concentrate risk on one individual’s capacity and decisions.

• Compliance and Reporting: The company is up to date with filings and accounts, indicating good "corporate health" and adherence to regulatory requirements.

Overall, the financial "vital signs" suggest a start-up in a stable early phase but with vulnerabilities around liquidity and operational scale. The company’s health resembles a patient recently admitted to hospital—stable but requiring close monitoring and supportive care to build resilience.

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4. Recommendations: Steps to Improve Financial Wellness

1. Improve Cash Reserves:

   • Prioritize collecting outstanding debtors promptly to boost cash flow.
   • Consider maintaining a minimum cash buffer to cover at least 1-2 months of liabilities.

2. Operational Scaling:

   • Evaluate need for hiring or subcontracting staff to expand operational capacity and increase revenue generation.

3. Financial Monitoring:

   • Implement regular cash flow forecasting to anticipate liquidity needs and avoid "symptoms of distress."
   • Track key performance indicators (KPIs) such as debtor days and creditor days.

4. Profit Generation:

   • Focus on securing contracts and projects to transition from capital reliance to trading profits.
   • Monitor margins closely given the competitive nature of roofing and building development.

5. Risk Management:

   • Consider business insurance and contingencies for unforeseen costs or delayed payments.
   • Maintain clear records and compliance to avoid regulatory issues.

6. Strategic Planning:

   • Develop a business plan with clear financial goals, investment needs, and growth milestones.
   • Explore funding options if capital investment is required for expansion.

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