PAB CONSTRUCTION SERVICES LTD
Company number 11734467 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Financial Health Assessment: PAB CONSTRUCTION SERVICES LTD
1. Financial Health Score: D (Guarded / Poor)
Grade D indicates the company is showing clear signs of financial distress, though it is not yet in terminal decline.
The balance sheet shows liabilities exceeding assets (negative net assets) for four consecutive years, and short-term liquidity is strained. However, the company remains active, its statutory filings are up to date, and the net liability position narrowed during 2024. This suggests a serious but potentially stabilising condition rather than an immediate collapse.
2. Key Vital Signs
| Metric | 2024 | 2023 | Interpretation |
|---|---|---|---|
| Net assets / Net liabilities | £-30,585 | £-40,042 | The company owes more than it owns. Think of this as chronic low blood pressure: the business is technically balance-sheet insolvent, but the deficit shrank by roughly £9,500 year-on-year, a modestly positive sign. |
| Working capital (net current assets) | -£24,514 | -£21,870 | Current assets do not cover current liabilities. Negative working capital means the company lacks a short-term financial cushion. |
| Current ratio | ~0.33 | ~0.42 | For every £1 owed within the next year, only about 33p is available in liquid assets. A healthy ratio is typically closer to 1.5–2. This is a significant liquidity strain. |
| Total assets | £13,692 | £18,004 | The asset base has contracted. Fixed assets fell to £1,544, suggesting limited reinvestment or natural depreciation without replacement. |
| Creditors due within one year | £36,662 | £37,786 | Short-term obligations remain high relative to available cash and debtors. |
| Creditors due after more than one year | £6,163 | £18,935 | Long-term borrowings have fallen sharply, which reduces future repayment pressure but may also indicate that longer-term finance has been repaid or converted. |
| Filing compliance | Up to date | Up to date | Administrative health is good; no overdue accounts or confirmation statements. |
| Employees | 1 | 2 | Operational headcount has halved, consistent with a smaller trading footprint. |
Note on data limitations: The filed accounts are filleted, meaning the profit and loss account is not publicly available. Consequently, turnover, gross profit, and net profit cannot be assessed from this data alone. It is like a medical examination missing a key blood test—we can observe the patient’s outward condition, but internal profitability is not visible.
3. Diagnosis
PAB CONSTRUCTION SERVICES LTD is trading in a state of balance sheet insolvency: total liabilities exceed total assets, and shareholders’ funds are negative. This condition has persisted since at least 2021, having previously been in a positive net asset position in 2019 and 2020.
The most recent accounts show the company is not deteriorating further. Net liabilities reduced from approximately £40,000 to £30,600, and long-term creditors fell significantly. Nevertheless, the company’s immediate liquidity is weak: current assets of roughly £12,000 must cover creditors due within one year of roughly £36,700. Unless cash flow is carefully managed, there is a risk that creditors could pressure for payment, potentially jeopardising continued trade.
The reduction in employees from two to one and the decline in fixed assets suggest the business may be operating at a smaller scale than previously.
4. Recommendations
-
Protect and improve working capital
Tighten credit control on amounts owed by customers, review payment terms on construction contracts, and consider negotiating extended terms with suppliers where possible. -
Address the negative net asset position
Options include cash injection by the owners, converting director loans into equity, or restructuring debt. Without a plan to move net assets back into positive territory, the company remains vulnerable to creditor action. -
Produce full management accounts
Because the public filing does not include a profit and loss account, the directors should prepare monthly profit and cash flow forecasts internally. This will reveal whether individual jobs are profitable and whether the business can cover its overheads. -
Monitor creditor pressure closely
Prioritise payments to critical suppliers and HMRC. If the company cannot pay debts as they fall due, seek professional advice promptly to explore options before the position worsens. -
Decide on fixed asset strategy
With fixed assets down to approximately £1,500, determine whether equipment needs replacement to sustain operations, or whether the business model can continue with a leaner asset base. -
Maintain filing compliance
Continue submitting accounts and confirmation statements on time to avoid penalties and preserve the company’s good standing at Companies House.