Leodis Developments Ltd · Cash Flow · Financial Year 2026/27
The account reaches zero in February. Most of what drains it is crew wages the next job will carry.
A busy summer holds the balance near £200,000, but every site is finished by November and from there the balance falls £583,726 to its June low. It looks like a mountain to climb. Take out the engineer payroll that any new job pays for, and what is really left to cover is overheads and the directors' pay — the same break even the profit forecast already names, and in cash it is a lower bar.
Where the cash goes, and when
The runwayThe balance opens at £113,228, is lifted by the summer's receipts to a peak of £224,839 in August, and holds near £200,000 while the last jobs invoice. It then falls away as the projects settle, through zero in February, down to £(384,789) by June, a net outflow of £(498,018) across the year on today's committed book.
Three phases, not two. Why it holds, then falls.
All five projects run and finish at staggered dates, St John Fisher first in August, Staveley last in November. We collect at month end plus 30 while paying suppliers at month end plus 60, so we are paid before we pay out and the balance holds.
The vans are off site everywhere, but cash keeps moving. December collects the last applications while the plus 60 day cost tail means we are still paying for October and November's work. The income runs out before the costs do.
The cost tail is exhausted and nothing new is booked, so nothing comes in. The account carries only the fixed drain of about £79,700 a month, and a £65,000 corporation tax bill lands in February, the month the balance crosses zero.
A £583,726 fall, or the hurdle we already know?
The real size of itThe account does not fall because the projects are unprofitable. While they run they throw off gross profit; it falls because after November there is no new gross profit landing on the fixed cost of keeping the business open. That fixed drain divides in two, and only one part is a genuine hurdle:
Across the year that hurdle is £358,571 of project gross profit, and it sits well below the £570,000 the profit break even needs, because in cash the VAT comes back to us and retention lands from past jobs. Steadying the ship is not finding £583,726 of dead cash. It is winning enough work that its gross profit covers overheads and finance, while the crews pay for themselves the moment they are back on site.
£358,571 of gross profit, sized two ways
What it takes to get thereFirst per engineer day. In cash the committed jobs only cover their own costs, so unlike the profit view there is nothing banked to set against the target; the whole figure has to come from filling the idle engineers' spare days. That capacity is 227 crew days a month across the seven months without work, 1,589 days in all, so break even is £226 of gross profit a day and the £20,000 monthly cushion takes it to £314 a day.
Second as turnover. That gross profit has to be won as project work, and how much turnover it takes depends on the margin it runs at. At the 35% we plan to, Tetley's benchmark, break even takes about £1.02m of work; win it leaner and it takes proportionately more to bank the same gross profit.
| Project margin | To break even | To £140k cushion |
|---|---|---|
| 35% Planning | £1,024,489 | £1,424,489 |
| 30% | £1,195,237 | £1,661,903 |
| 25% | £1,434,284 | £1,994,284 |
| 20% | £1,792,855 | £2,492,855 |
| 15% | £2,390,473 | £3,323,807 |
Margin is the single biggest lever: winning the work at 25% rather than 35% adds nearly £410,000 of required turnover just to break even.
What gets us through
Steadying the shipFix a review date now, with a plan ready if it passes
A big job takes months to win and deliver, so the decision cannot wait for the account to fall. If no big project is won by the end of September, the directors sit down and build a plan, whether cost action, funding or a change of pace on delivery, to be in place across October and November, while the account is still strong at around £200,000 and the crews are on site to act on. That is well ahead of the fall that takes the balance to £100,000 by December and through zero in February.
Collect what is already owed
The Lawns retention is overdue and sitting outside the forecast, and the finishing jobs have final accounts to settle. Every pound pulled forward pushes the February date further out.
Refill the book, and trust the terms
Two big jobs and the small works behind them is what covers overheads and finance. And because we collect at plus 30 and pay at plus 60, a won job brings cash back within about a month, so the recovery runs quicker than the fall.
The account looks healthy today and reaches zero in February. Winning and delivering new work takes months, and its cash follows a month behind, so the review sits in September, while the account is still strong, not once the balance is already draining.