THEO CONSTRUCTION UTILITIES LTD

Executive Summary

THEO CONSTRUCTION UTILITIES LTD is a very young and small-scale business with modest net asset growth but short-term liquidity constraints evidenced by negative working capital. The company’s improved cash position is encouraging, but the limited financial history and size mean lending is recommended only on a conditional basis with close monitoring of cash flow and contract pipeline. Continued focus on working capital management and business growth will be critical to support credit facilities going forward.

THEO CONSTRUCTION UTILITIES LTD - Analysis Report

Company Number: 14281508

Analysis Date: 2025-07-29 21:00 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   THEO CONSTRUCTION UTILITIES LTD is a very young private limited company in the construction of utility projects sector, having incorporated in August 2022. The company shows modest net asset growth over two years, with net assets increasing from £7,817 in 2023 to £16,038 in 2024. However, the company carries a working capital deficit (net current liabilities of £27,341 in 2024, though improved from £32,078 in 2023). This indicates short-term liquidity pressure and dependence on timely cash inflows or external financing to meet current obligations. Given the limited financial history and single-employee operation, lending should be conditional on obtaining further cash flow forecasts, confirmation of contract pipeline, and possibly personal guarantees or collateral.

2. Financial Strength:
   The company’s balance sheet shows a small but positive net asset position, which improved by roughly 105% compared to the prior year. Fixed assets increased slightly to £43,379, reflecting some investment in plant and equipment, partially offset by depreciation charges. The company’s equity entirely consists of retained earnings with minimal share capital (£2). The current liabilities exceed current assets, leading to a negative working capital position, which is a risk factor. The small scale of operations and very limited equity base mean the company has low financial resilience to downturns or unexpected expenses.

3. Cash Flow Assessment:
   Cash at bank improved from £16,420 to £25,313, which is a positive sign of enhanced liquidity. Debtors increased marginally, suggesting ongoing sales activity, but the company still has a working capital deficit. Current liabilities are significant relative to cash and receivables, indicating that the company may rely on short-term borrowings or timely collections to meet obligations. The single employee count suggests low overhead costs, aiding cash flow stability, but the absence of detailed profit and loss data limits deeper cash flow analysis. The company should demonstrate ability to convert debtors into cash promptly and control payables to reduce liquidity risk.

4. Monitoring Points:

• Improvement in net current assets to positive territory to reduce short-term liquidity risk.
• Consistency and growth in turnover and profitability once detailed P&L data become available.
• Timely collection of trade receivables and management of payables.
• Any increase in employee count or operational scale, which may impact working capital needs.
• Ongoing compliance with filing deadlines to ensure transparency and early warning of financial distress.
• Confirmation of new contracts or customer diversification to mitigate concentration risk.