CORNHILL BUILDING SERVICES LIMITED

1. Risk Rating: MEDIUM

The company is technically solvent at the latest balance sheet date and its filing record is compliant, but the scale of recent balance-sheet shrinkage and the current thin equity cushion make it a medium-risk counterparty. The trend is distinctly negative, and the margin for absorbing further losses is now very small.

2. Key Concerns

1. Severe and sustained erosion of net assets
   Net assets have fallen from approximately £913,000 in 2019 to £781,767 in 2021, £561,594 in 2023, £170,303 in 2024 and only £39,883 in 2025. Retained earnings fell from £198,911 to £38,611 in the latest year alone. This indicates either recurring losses, substantial distributions, or a combination of both. There is no income statement in the filed accounts, so the driver of this decline cannot be confirmed.

2. Dramatic contraction of the balance sheet
   Total assets fell from £1,159,913 in 2023 to £120,491 in 2025. Tangible fixed assets have reduced to £nil, cash has fallen from £1,348,475 in 2021 to £94,751 in 2025, and debtors are down to £25,740. The company appears to be either materially downsizing, winding down operations, or converting assets to cash. For a construction business, this raises questions about the order book, future revenue capacity, and continuity of operations.

3. Thin capital buffer relative to potential risks
   Net assets of £39,883 provide very little protection against adverse trading, legal claims, or construction defects. Although current assets exceed current liabilities and cash covers near-term creditors, a relatively modest loss or an unexpected liability could eliminate the remaining equity. The accounts are unaudited, so there is limited independent assurance over the reported figures.

3. Positive Indicators

• Current position is technically solvent
  At 31 October 2025, current assets of £120,491 exceeded current liabilities of £80,608, giving positive working capital of £39,883. Cash of £94,751 was sufficient to cover all creditors due within one year.

• Compliant filing record
  The latest accounts are filed and not overdue, and the confirmation statement is also up to date. There are no signs of liquidation, administration, or regulatory enforcement action in the available data.

• Long-term liabilities have been eliminated
  Creditors falling due after more than one year and deferred tax provisions were £nil at the 2025 year end. The company has significantly reduced its external debt burden.

4. Due Diligence Notes

• Obtain the full profit and loss account and management accounts. The filed small company accounts do not include an income statement, so the source of the £160,300 reduction in retained earnings during FY2025 is not disclosed.
• Clarify whether the company is continuing to trade, is in a managed wind-down, or has ceased active construction work. The sale/disposal of all tangible fixed assets and the collapse in total assets warrant an explicit explanation from management.
• Request a current order book and pipeline of contracts. Construction businesses need working capital and forward revenue to support going-concern status.
• Investigate all movements in shareholder funds, including dividends, director remuneration, and related-party transactions. The absence of an audit increases the importance of this review.
• Check for contingent liabilities, warranty claims, retentions, or ongoing contractual disputes, which are common in construction and not fully visible in abbreviated filings.
• Review bank facilities and confirm whether directors have provided personal guarantees or whether any borrowings have been refinanced outside the company.
• Consider obtaining a third-party credit report and checking County Court Judgments and payment history with key suppliers and subcontractors.

Executive Summary

Cornhill Building Services Limited remains technically solvent and compliant, but its financial position has deteriorated materially: net assets have fallen from roughly £913,000 in 2019 to only £39,883 in 2025, and total assets have contracted sharply. The company holds enough cash to cover current liabilities, but the equity cushion is now thin and the absence of an income statement limits visibility into whether losses or distributions caused the decline. Further due diligence is required before any investment or extended credit is contemplated.