STARLEX SCAFFOLDING LTD

Executive Summary

Starlex Scaffolding Ltd is a newly formed small scaffolding business with a modest positive net asset and working capital position. The company currently demonstrates limited trading history and low cash reserves, imposing some credit risk. Conditional approval is recommended with tight facility limits and ongoing monitoring of cash flow, receivables, and operational performance to ensure continued creditworthiness.

STARLEX SCAFFOLDING LTD - Analysis Report

Company Number: SC781444

Analysis Date: 2025-07-20 13:52 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Starlex Scaffolding Ltd is a newly incorporated private limited company (incorporated Sept 2023) operating in scaffold erection, a sector with steady demand in construction. The unaudited accounts for the first 13-month period show a modest but positive net asset position (£27k) and positive working capital (£10.8k). However, as a new business with no prior trading history and no employees reported, the credit risk is higher due to limited operational track record and cash resources (£5.7k). The director, who is also the sole shareholder, has financed the company partly via loans, but these are minimal. Given these factors, approval for credit facilities should be conditional on ongoing monitoring of trading performance and cash flow, with limits commensurate to the company's size and risk profile.

2. Financial Strength:
   The balance sheet as of 30 Sept 2024 shows:

• Fixed assets (motor vehicle) of £16,218 net book value.
• Current assets of £46,891 comprised mainly of debtors (£41,184) and cash (£5,707). The high debtor amount suggests extended receivables or early invoicing; credit risk on these debtors should be assessed.
• Current liabilities of £36,069, including finance lease obligations (£15,998) and tax/social security liabilities (£20,072).
• Net current assets (working capital) positive at £10,822 indicating short-term liquidity cushion.
• Net assets and shareholder funds are £27,039 showing modest equity base.
  Overall, the balance sheet is sound for a start-up, but the relatively high current liabilities and dependence on receivables highlight potential liquidity pressures.

3. Cash Flow Assessment:
   Cash at bank is low (£5,707), which is normal for a start-up but limits the ability to absorb shocks or delays in cash collection. The company reports no employees, which may reduce payroll outflows but could also indicate limited operating capacity. The director’s loans are negligible, so external financing support is minimal. The working capital is positive but tight. The company’s ability to convert debtors to cash quickly will be critical to maintaining liquidity. No trading profit or loss figures are disclosed, so actual cash generation is unclear. Close monitoring of cash flow statements and debtor aging is recommended.

4. Monitoring Points:

• Receivables aging and debtor credit quality to mitigate liquidity risk.
• Cash flow trends and ability to meet short-term obligations, especially finance lease and tax liabilities.
• Progress in generating operating profits and turnover growth to build retained earnings.
• Director’s continued financial support or injection of equity if needed.
• Compliance with filing deadlines and any changes in company status or director appointments.
• Industry and economic conditions impacting scaffold erection demand.