TEESWORKS CLADDING CO LIMITED

Executive Summary

Teesworks Cladding Co Limited is a start-up private limited company with a modest but positive balance sheet. Its creditworthiness depends heavily on the prompt collection of significant related party receivables and management of working capital. Credit approval is recommended with conditions to closely monitor liquidity and related party exposures, given the absence of audited accounts and thin equity base.

TEESWORKS CLADDING CO LIMITED - Analysis Report

Company Number: 14555103

Analysis Date: 2025-07-19 12:43 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Teesworks Cladding Co Limited is a recently incorporated company (Dec 2022) operating in building completion and finishing. The latest financial statements as of 31 March 2024 show a positive net current asset position (£39.5k) and shareholders’ funds of the same amount, indicating a modest but positive equity base. However, the company has significant debtors (£1.5M) nearly equal to current liabilities (£1.48M), largely owed by group undertakings (£1.02M). This related-party exposure raises some concentration risk and potential liquidity concerns. The company is not audited and financials are unaudited, adding some uncertainty. The directors’ going concern statement is positive, but credit approval should be conditional on monitoring related party balances and ensuring timely collections.

2. Financial Strength:
   The balance sheet shows no fixed assets and is essentially working capital-driven. Debtors increased sharply from £50 in 2023 to £1.5M in 2024, with a corresponding rise in current liabilities primarily due to amounts owed to group undertakings (£1.02M) and trade creditors. Share capital is minimal (£100), and reserves of £39.4k arise from accumulated profits or retained earnings since inception. The company’s net assets are positive but small relative to turnover expectations implied by debtor size. The capital structure is thin and reliant on group funding, limiting standalone financial strength.

3. Cash Flow Assessment:
   Cash equivalents are not disclosed but the net current asset position implies some short-term liquidity cushion. The large debtor balances, especially intercompany receivables, could negatively impact cash flow if not collected promptly. Current liabilities are substantial but appear covered by current assets. The company employs only 2 people, which helps limit overheads. Overall, the liquidity appears adequate but highly dependent on related party transactions and debtor collections, warranting close cash flow monitoring.

4. Monitoring Points:

• Timely collection of trade and intercompany debtors to avoid liquidity strain
• Movements and aging of amounts owed to and from group undertakings
• Profitability trends when P&L accounts become available to assess operational performance
• Changes in working capital and net current assets on future filings
• Any related party transaction disclosures and financial support arrangements
• Directors’ compliance with governance and financial controls given unaudited status