WICKHAM CONSTRUCTION IOW LTD

Executive Summary

Wickham Construction IOW Ltd has made a significant turnaround from previous financial distress to a positive net asset and healthy cash position, signaling recovery and improved financial health. However, the absence of profitability data and rising current liabilities warrant cautious management of cash flow and operational efficiency. With prudent financial controls and strategic growth planning, the company can build on this recovery to achieve sustainable financial wellness.

WICKHAM CONSTRUCTION IOW LTD - Analysis Report

Company Number: 14929328

Analysis Date: 2025-07-29 16:03 UTC

Financial Health Assessment of Wickham Construction IOW Ltd

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1. Financial Health Score: C

Explanation:
Wickham Construction IOW Ltd shows promising recovery and growth but currently remains in a delicate financial condition typical of a young company finding its footing. The company shifted from a negative net asset position to positive within one year, reflecting initial symptoms of financial healing, but the relatively modest asset base and current liabilities suggest caution. The score "C" reflects a company that is emerging from distress but is not yet in robust financial health.

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2. Key Vital Signs

Metric	Value (Year End 31/03/2025)	Interpretation
Net Assets	£4,936	Positive net assets indicate the company has more assets than liabilities – a sign of financial recovery.
Net Current Assets (Working Capital)	£4,049	Positive working capital suggests the company can meet short-term obligations, indicating healthy liquidity.
Cash Balance	£17,877	Strong cash position is a vital sign of healthy cash flow and ability to fund operations and growth.
Current Liabilities	£14,055	Significant current liabilities, mainly trade creditors and tax/social security, require careful management.
Fixed Assets	£887	Small asset base consistent with a micro/small company; assets primarily in computer equipment.
Shareholders’ Funds	£4,836	Equity capital is positive, reflecting shareholder investment and retained earnings turnaround from prior losses.
Turnover / Revenue	Not disclosed	Lack of turnover data limits evaluation of profitability or revenue growth trends.
Employee Count	1 (average)	Very small workforce, typical of a micro enterprise, with potential constraints on scaling operations.

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3. Diagnosis: Financial Condition and Underlying Health

Symptoms of Distress (Past):

• In the first financial year and the year before last, the company showed negative net assets (-£879 and -£979), indicating insolvency symptoms or financial stress typical of a startup phase where initial losses or liabilities exceeded assets.

Signs of Recovery (Present):

• The latest financial year shows a clear turnaround with net assets positive at £4,936, and working capital improving from negative (£-879) to positive (£4,049), indicating that short-term liquidity has strengthened significantly.
• The strong cash position (£17,877) improves the company’s ability to cover immediate obligations and suggests healthy operational cash flow or recent capital injections.
• The increase in creditors (£14,055) relative to previous years signifies growing business activity, but also a need for careful cash flow monitoring to avoid liquidity crunches.

Underlying Health:

• The company is in a phase of establishing itself with modest fixed assets and a small team.
• The construction sector (SIC 41202) often involves project-based cash flow fluctuations, so stable liquidity is critical.
• The positive shareholders’ funds and net assets indicate that the company’s balance sheet is no longer under distress, but profitability data is absent, creating uncertainty about operational efficiency.
• Directors' involvement and shareholding concentration suggest committed ownership but also potential concentration risk.

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4. Recommendations: Prescriptions for Improved Financial Wellness

• Improve Revenue Transparency and Profitability Tracking:
  Start reporting turnover and profit/loss details in financial statements to diagnose operational efficiency and earnings quality.

• Cash Flow Management:
  Maintain and monitor cash reserves tightly, especially with rising creditors and tax liabilities. Implement cash flow forecasting tools to anticipate short-term needs.

• Creditors Management:
  Negotiate payment terms with suppliers and tax authorities to smooth out cash outflows and reduce liquidity strain.

• Growth Planning and Scaling:
  Given the small workforce and asset base, consider strategic hiring or partnerships to scale operations sustainably without overextending finances.

• Financial Reporting and Audit Consideration:
  While currently exempt from audit, voluntary audit or external financial review could provide credibility and early risk detection as the company grows.

• Capital Structure Review:
  Assess if further equity injections or financing is required to support expansion plans and buffer against unforeseen expenses.

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Medical Analogy Summary

Wickham Construction IOW Ltd was showing symptoms of financial distress in its early years, akin to a patient initially diagnosed with an infection. Over the last year, it has shown a healthy response to treatment: improved liquidity ("healthy cash flow"), positive net assets ("strengthened vital signs"), and better working capital ("improved immune response"). However, like a patient recovering from illness, it remains in a vulnerable state requiring careful monitoring of cash flow and operational efficiency to ensure full recovery and long-term health.

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