TC SCAFFOLDING LTD

Executive Summary

TC Scaffolding Ltd is a young private company showing modest growth in net assets but has a negative working capital position due to high current liabilities. While fixed assets and cash balances provide some support, liquidity constraints warrant caution. Credit approval is recommended on a conditional basis pending further evidence of cash flow sufficiency and operational stability.

TC SCAFFOLDING LTD - Analysis Report

Company Number: 14194726

Analysis Date: 2025-07-29 15:17 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   TC Scaffolding Ltd is a recently incorporated company (2022) operating in scaffold erection. The company shows modest net asset growth (£2,782 in 2023 to £6,023 in 2024) and positive shareholder funds, indicating some capital retention and profit accumulation. However, the company has significant current liabilities (£24,301) exceeding current assets (£6,726), resulting in negative net working capital (-£17,575), which raises liquidity concerns. Given the limited operating history and negative working capital position, credit approval should be conditional on obtaining further evidence of cash flow sufficiency or external support to cover short-term obligations.

2. Financial Strength:
   The balance sheet shows fixed assets of £28,195, mainly plant, machinery, and motor vehicles, which provide some tangible backing. Shareholders' funds have increased, reflecting retained earnings, but remain modest at £6,023. The company carries a significant current liabilities load relative to its current assets, resulting in a strained liquidity position. Deferred tax liabilities (~£4,597) further reduce net asset value. Overall, financial strength is weak to moderate for a company at this stage, with reliance on continued profitability and cash management to improve solvency.

3. Cash Flow Assessment:
   Cash at bank and in hand increased from £3,943 to £6,395, which is a positive sign. Debtors remain low (£331), indicating limited trade receivables exposure. However, current liabilities remain high and stable around £24,300, suggesting potential pressure on working capital. The negative net current assets imply that the company may face difficulties meeting short-term obligations without additional financing or improved cash conversion cycles. Regular monitoring of cash flow forecasting and creditor management is advisable.

4. Monitoring Points:

• Working capital trends and ability to reduce current liabilities or increase current assets.
• Profitability and cash flow from operations to support debt servicing.
• Any new debt or financing arrangements that affect liquidity.
• Director conduct and related party transactions given the 100% control by one individual.
• Timely filing of accounts and confirmation statements to ensure regulatory compliance.