STANDBY FOR SAFETY UTILITIES LTD

Executive Summary

Standby For Safety Utilities Ltd shows a marked improvement in financial health with strengthened liquidity and equity in the latest year, reflecting robust cash flow and effective management of short-term obligations. However, high dividend payouts relative to equity and dependence on a single director suggest caution and the need for prudent reinvestment and risk diversification. Overall, the company is financially stable with potential for sustainable growth if these areas are addressed.

STANDBY FOR SAFETY UTILITIES LTD - Analysis Report

Company Number: SC728243

Analysis Date: 2025-07-29 21:14 UTC

Financial Health Assessment for STANDBY FOR SAFETY UTILITIES LTD (Year ended 30 April 2024)

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1. Financial Health Score: B

Explanation:
The company shows solid improvement in its financial position over the last year, particularly in liquidity and net assets. While the business remains small and relatively young (incorporated in 2022), it displays signs of healthy cash flow management and strengthened working capital. The score of B reflects a stable financial condition with room for growth and risk mitigation, especially considering the company’s reliance on a single director and shareholder.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	18,510	18,265	Stable current asset base indicating good short-term resource availability.
Cash at bank and in hand	10,521	9,725	Healthy cash reserve, showing a positive cash flow "heartbeat".
Debtors	7,989	8,540	Slight reduction, manageable receivables with no alarming increase in credit risk.
Current Liabilities	8,849	17,935	Significant reduction, reducing short-term financial pressure ("symptom of distress" alleviated).
Net Current Assets (Working Capital)	9,661	330	Marked improvement, indicating improved liquidity and ability to cover short-term debts.
Net Assets / Shareholders Funds	9,661	330	Increased equity base reflects retained earnings and financial strengthening.
Dividends Paid to Director	25,000	22,000	High dividends relative to net assets, possibly indicating reliance on owner’s capital return.
Number of Employees	1	1	Small operational scale, dependent on key personnel.

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3. Diagnosis: Financial Condition and Underlying Health

• Liquidity and Cash Flow: The company demonstrates a "healthy cash flow pulse," with cash and current assets comfortably exceeding current liabilities by a wide margin in 2024. This suggests the business can meet its short-term obligations without distress, a positive sign for operational stability.

• Working Capital Improvement: The dramatic increase in net current assets from £330 to £9,661 is a strong indicator of improved financial health and better cash management or debt reduction. The previous year's tight liquidity situation ("symptom of liquidity strain") has been effectively addressed.

• Profit Retention and Equity Growth: Net assets have increased substantially, indicating the company is retaining earnings or improving its capital base. This "strengthened financial skeleton" provides a buffer for future challenges or growth opportunities.

• Dividend Policy: The company pays significant dividends relative to its equity base. While this is common in owner-managed small companies, it may raise concerns about the sustainability of such payouts if operating profits fluctuate or if reinvestment needs arise.

• Size and Operational Scope: As a micro or small entity with only one employee (the director), the company’s financial health is closely tied to the director’s personal involvement and financial decisions, posing a potential "single-point failure" risk.

• Industry Context: Operating in electricity transmission (SIC 35120), the company is likely capital-intensive with regulatory considerations. However, the current accounts show no fixed assets, suggesting a service or intermediary role rather than ownership of infrastructure.

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4. Recommendations for Financial Wellness Improvement

• Enhance Dividend Sustainability: Review dividend levels to ensure sufficient retained earnings for business reinvestment and unforeseen expenses, avoiding excessive cash extraction that might strain future liquidity.

• Build Fixed Asset Base or Long-Term Investments: Consider investing in fixed assets or securing longer-term contracts, which could strengthen the asset base and reduce operational risks in the capital-intensive electricity transmission sector.

• Diversify Operational Risk: Explore hiring additional personnel or creating operational redundancies to reduce dependence on a single director, thereby improving business continuity prospects.

• Strengthen Credit Control: Maintain vigilance on debtor balances to prevent overdue receivables which could impair liquidity.

• Formalize Financial Planning: Implement forecasting and budgeting processes to anticipate future cash needs, especially given the seasonality or regulatory impacts common in utility sectors.

• Maintain Compliance and Governance: Continue timely filing of accounts and confirmation statements to avoid penalties and maintain good corporate standing.

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Executive Summary