SP CONSTRUCTIONS (COV) LTD

Executive Summary

SP Constructions (COV) Ltd exhibits ongoing financial weakness with negative net assets and significant working capital deficits, reflecting poor liquidity and limited ability to meet short-term liabilities. Given the lack of financial improvement and small asset base, extending credit carries high risk. Close monitoring of liquidity and any capital support is essential before reconsidering credit exposure.

SP CONSTRUCTIONS (COV) LTD - Analysis Report

Company Number: 13607344

Analysis Date: 2025-07-29 18:04 UTC

1. Credit Opinion: DECLINE
   SP Constructions (COV) Ltd is in a weak financial position with sustained negative net assets and working capital deficits over the past two years. The company shows continued net current liabilities and negative shareholders' funds, indicating an inability to meet short-term obligations from current assets. The business is still relatively new (incorporated 2021) but has not demonstrated financial improvement or profitability to support credit extension confidently. Without significant improvement or external capital injection, the risk of default is high.

2. Financial Strength:
   The balance sheet reveals net liabilities of £11,378 as of 30 September 2024, an improvement from £17,474 the previous year but still negative. Fixed assets are minimal at £5,996, and current liabilities significantly exceed current assets (£7,513 vs £23,087), resulting in a working capital deficit of £15,574. The company’s equity is negative, which undermines its financial resilience and limits borrowing capacity. The small asset base and increasing liabilities suggest the company is not building a solid financial foundation.

3. Cash Flow Assessment:
   Current assets primarily consist of cash and receivables but are insufficient to cover current liabilities, indicating liquidity stress. The persistent negative working capital position suggests difficulties in managing day-to-day operational cash flow and servicing short-term debts. There is no indication of improved liquidity or cash flow generation from operations in the latest filings, which raises concerns about the company’s ability to meet payment obligations on time.

4. Monitoring Points:

• Track changes in net current assets and net liabilities for signs of financial stabilization or deterioration.
• Monitor cash flow trends and incoming payments to assess liquidity improvements.
• Review director or shareholder capital injections or restructuring efforts.
• Watch for any late filings or changes in company status that may indicate distress.
• Observe any changes in business activity or contracts in the construction sector that could impact revenue.