A MCCAULEY LIMITED

Risk Rating: MEDIUM
The company has a strong balance-sheet position with positive net assets and a very healthy current ratio. However, limited financial disclosure, a single-person operation, and significant long-term borrowings in a cyclical construction sector justify a medium risk rating.

1. Key Concerns

1. Significant Long-Term Borrowings
   At 31 December 2025, the company carried £125,000 in creditors falling due after more than one year. This is equivalent to roughly 65% of net assets. The nature, security, and repayment terms of this debt are not disclosed in the micro-entity accounts and need clarification.

2. Limited Financial Transparency
   As a micro-entity, the company is exempt from audit and does not file a profit and loss account. Revenue, gross margin, operating costs, and cash flow are not visible. This makes it difficult to assess earnings quality or sustainability from the filed accounts alone.

3. Key-Person and Sector Concentration
   The company has one director and one employee, with a single individual controlling more than 75% of shares and voting rights. Operational continuity is heavily dependent on this individual. In addition, the construction of domestic buildings sector is subject to cyclical demand, cash-flow timing issues, and potential project retentions.

2. Positive Indicators

• Strong Working Capital Position
  Current assets of £313,867 comfortably exceed current liabilities of £20,245, producing net current assets of £293,622. The current ratio is approximately 15.5, indicating a robust short-term liquidity buffer.

• Growing Net Assets
  Net assets have increased from £74,591 in 2023 to £162,473 in 2024 and £191,483 in 2025. This suggests improving retained financial strength in the most recent two years.

• Compliant Filing History
  Accounts and confirmation statement are up to date, with no overdue filings identified. The company is active and has been incorporated since 2014, demonstrating continuity.

3. Due Diligence Notes

• Clarify Long-Term Debt
  Obtain the repayment schedule, interest rate, and security for the £125,000 long-term creditors. Confirm whether this is a bank loan, director loan, or other financing, and whether it is subordinated to other creditors.

• Request Management Information
  Since the statutory accounts are abbreviated, request management accounts, cash flow forecasts, and a current project pipeline to assess liquidity and forward revenue visibility.

• Investigate the 2023 Net Asset Dip
  Net assets fell from £94,313 in 2022 to £74,591 in 2023, before recovering strongly. Establish whether this was due to trading losses, director drawings, dividends, or reclassification.

• Review Related-Party Activity
  With a single director and majority owner, there is potential for related-party transactions. Confirm that any director loans, dividends, or expense arrangements are commercially reasonable and properly documented.

• Verify Historical Data Anomalies
  The financial history shows identical total assets and liabilities for multiple earlier years. Confirm whether this reflects genuinely flat trading or a data reporting issue.

• Assess Construction-Specific Risks
  Review contract terms, retentions, warranty obligations, and insurance cover. Consider whether the company has any contingent liabilities from ongoing or completed domestic construction projects.